While the challenge of accessing capital plagues most small-business owners, the problem is especially acute among minority-owned ventures. A look at U.S. Small Business Administration lending data indicates an ongoing divide: Only 2 to 3 percent of loans go to African American-owned businesses, while the rate for Latinos ranges from just 5 to 6 percent. These numbers are far lower than each group’s percentage of the U.S. population, at 13.3 percent and 17.8 percent respectively, per U.S. census data.
JPMorgan Chase started to bridge that gap when in 2015 it launched its Entrepreneurs of Color Fund (EOCF) for Detroit. That initiative has already translated to $4.7 million in loans to 45 minority-owned small businesses, with more than 600 new or preserved jobs. Also breaking down gender lines, 53 percent of the loans are supporting minority women-owned businesses.
“It’s about more than the money — it’s about using our expertise and data,” explained Head of Corporate Responsibility Peter Scher of JPMorgan Chase at a Feb. 14 “Entrepreneurs of Color” convening at MEDA’s Plaza Adelante. “That means jobs, neighborhood revitalization, small businesses and financial health.”
Building on the success in Detroit, JPMorgan Chase has chosen to scale the initiative by bringing it to New York City’s South Bronx and San Francisco — two other areas in need of capital for communities of color looking to start or expand ventures.
While similar in overall approach, the implementation must look different based on disparate economic conditions. For example, Detroit features plenty of open space, with 673,000 denizens in 143 square miles, while 865,000 San Franciscans are packed into a mere 49 square miles. The latter translates to escalating commercial rents creating challenges opening a brick-and-mortar location.
Commented Scher, “You can’t go to San Francisco with Detroit solutions.”
The day’s roundtable was seamlessly facilitated by JPMorgan Chase’s Northern California Relationship Manager, Global Philanthropy Amy Wallace. Panelists described the purpose and structure of EOCF, then leaders from local nonprofit partners, small businesses and government took turns sharing experiences, best practices and discoveries from their respective roles. This included partners in this initiative, which are Pacific Community Ventures, Working Solutions and ICA Fund Good Jobs.
Invited to be part of the roundtable were also two minority-owned businesses: Beija Flor Naturals, now with a pair of skincare stores, one in Oakland’s Temescal neighborhood and a second in San Francisco’s Lower Haight; and Tadu Ethiopian Kitchen in San Francisco’s Mission Bay, which now employs 12 community members. Their experiences showcased the need for access to capital, and how scaling of a business can become a reality upon receiving such funding.
Post-discussion, a tour of MEDA’s Mission neighborhood center, Plaza Adelante, was in order. The group saw how this location anchors an important corner of the Mission Street commercial corridor and creates longtime homes for other community-based organizations, while also serving as a microbusiness incubator for MEDA Business Development clients.
The group then ambled down Mission Street to see part of MEDA’s ever-growing affordable-housing portfolio, with three properties located in just two blocks of Plaza Adelante. The final stop of the trio was the nineteenth building the nonprofit has bought via San Francisco’s innovative Small Sites program. This latest purchase is a two-story, 16-unit property on the bustling corner of Mission and 17th streets. The building comprises 11 residential units, five commercial spaces and a parking lot. This property is now safe from speculators.
The power of community-development work was on full display, leading to a memorable day for all involved with this important JPMorgan Chase “Entrepreneurs of Color” event.