Loans

These 30+ Philly financial groups are bringing $10M in loans to Black and brown business owners

These 30+ Philly financial groups are bringing $10M in loans to Black and brown business owners
Written by Publishing Team

Philadelphia promotes itself as a friendly place to do business. But we often hear in our reporting that funding opportunities, networks, and other resources are hard to come by – locally and nationally – if you’re a person of color.

In response to the first part of that call, a group of more than 30 small business organizations and financial institutions were called in Greater Philadelphia Financial Services Leadership Coalition He launched a fund to support Community Development Financial Institutions (CDFIs) in lending money to black and black business owners in Philadelphia.

The alliance was formed out of the business community’s efforts to get the economy back on track amid the COVID-19 pandemic. In 2020, . was released Greater Philadelphia Chamber of Commerce Entrepreneurs and civil society leaders in Philadelphia and surrounding counties convened to form Philadelphia Regional Task Force for Recharge and Recovery. Last year, the alliance announced a $100 million four-year fund consisting of a mix of debt and equity to help black and brown business owners thrive or grow their businesses amid the pandemic.

This alliance has since grown to 30 financial institutions, including Federal Reserve Bank of PhiladelphiaAnd CDFI Pennsylvania Network And Urban Affairs Alliance.

“Despite the efforts that have been made in the past year, the assistance provided to small businesses has not met their needs, especially for businesses belonging to minorities.”

chair and betancourt

The first stage of this last effort: Philadelphia Fund for Growth, Resilience, Independence and Perseverance – This is the PHL GRIT Fund – launched this month.

Through the GRIT Fund, all 11 international development institutions in Philadelphia will receive grants that will help strengthen their operations. The goal is to help the CDFI ecosystem grow, and better serve small business owners, especially those who face systemic barriers to accessing capital. Among business owners of color, local financial institutions tend to be more trusted than mega-banks Dan Betancourt, president of the Pennsylvania Network CDFI and CEO of Community First Fund.

The fund, which will start at $10 million in its first year, will provide loans to 1,000 small black and brown-owned businesses with fewer than 500 employees in the Philadelphia area. A spokesperson said that details of how the fund would be divided among the IFIs had not yet been established, but that “grants would be made in proportion to the needs of the IFIs.”

The real estate finance institutions that will receive additional direct investment from consortium members in the first phase of this initiative are Beach CapitalAnd leading businessesAnd Enterprise capitalAnd WORCAnd Impact Loan FundAnd Neighborhood Progress Fund And granted.

“Despite efforts in the past year, the assistance provided to small businesses has not met their needs, particularly for minority businesses,” Betancourt said in a statement. “GPFSLC’s efforts are unique – we don’t realize that leaders of financial institutions come together on such a scale to address such pressing issues.”

These 10 black and Latinx entrepreneurs shared their stories for Technical.ly’s “Boosting Black and Latinx Entrepreneurship in Philadelphia” series. (Images courtesy of Canva)

The alliance also aims to raise an additional $10 million in philanthropy pooled next year to build the lending capacity of community development finance institutions. The CDFI of Pennsylvania will manage the capacity of CDFIs, and a goal in future phases of the GRIT Fund effort will be to provide support to larger CDFIs, including the Community First Fund, PIDC Capital And Reinvestment Fund.

The timetable or details on how or when companies can submit applications has not been made yet.

Some of the participating banks offered alternatives to provide capital directly to the GRIT Fund. Fulton Bank Establish loan sharing arrangements to allow local, minority and regional banks to contribute and maximize investments. Some banks like American bank Offer a “leadership gift” to seeding the charitable fund, while others work with the coalition’s volunteer program that provides accounting, marketing, strategy and law to advise businesses served by 11 community finance institutions. The coalition noted that these business support skills are the resources required by those served by local integrated development institutions.

He said, “Supporting Black and Brown’s business in our region during these unprecedented times is a priority for GPFSLC member financial institutions, and working closely with regional CDFI leaders on a sustainable model has been important.” Jim DefferCo-chair of the coalition and president of Bank of America Greater Philadelphia. “We look forward to successfully providing further support to Philadelphia business owners by expanding financial resources and building capabilities alongside our important partners at CDFI.”

Along with the Federal Reserve Bank of Philadelphia, the Pennsylvania Network CDFI and the Urban Affairs Coalition, the coalition consists of these financial institutions:

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