JPMorgan Chase and the Local Initiatives Support Corporation (LISC) have launched a $ 2.65 million pledge to provide capital and resources to entrepreneurs of color in Los Angeles.
Los Angeles has the largest small business economy in the United States, with over 250,000 small businesses.
However, there is a dearth of capital available for these small businesses, and entrepreneurs of color are disproportionately affected.
Earlier this month, the Entrepreneurs of Color Fund (EOCF) program was launched in Los Angeles to address this shortage. With $ 2.65 million in funding to support historically disadvantaged small business owners in Los Angeles, the fund is designed to help increase the availability of capital and business resources to strengthen small businesses owned by underserved entrepreneurs. .
âOur goal is to build an inclusive economy,â said Jenn Piepszak, Co-CEO of Consumer & Community Banking at JPMorgan Chase at the fund launch event at the Chase Community Center branch in Crenshaw District.
She added: “We know that for too long blacks and Latin Americans, in particular, have missed the growth and prosperity of our country.”
EOCF is a national collaboration with the Local Initiatives Support Corporation (LISC), a network of community development finance institutions (CDFIs), JPMorgan Chase and other funders.
To date, the EOCF has made over 1,200 loans and deployed over $ 43 million in capital to entrepreneurs of color nationwide, in cities such as Detroit, the Bay Area, the South of the Bronx, Chicago and the greater Washington area.
Los Angeles is now the sixth largest city served by the program, and according to JPMorgan Chase, while black and Latino residents make up 8% and 49% of Los Angeles County’s population, they only own 2% and 11% of the population, respectively. all companies.
Speaking at the event, Diedra PorchÃ©, CEO of Chase who heads the bank’s small business banking operations in California, explained that lending capital in Los Angeles has historically focused on micro-loans. under $ 100,000 or loans over $ 250,000, creating a âmissing linkâ for many small businesses. She noted that the program will help address this “critical” need.
According to additional figures provided by JPMorgan Chase, the landscape of the small business capital of Los Angeles County is characterized by a significant shortage of capital to meet the needs of small businesses and disproportionate traditional lending rates in high concentration neighborhoods. of black and Latino residents. As a result, there is an unmet demand of $ 60 billion per year for small businesses in Los Angeles County.
âWhen we started our business, we used our own money, our own credit cards, not knowing that there were financial tools and products that would have helped our business grow. Programs like this will help businesses of color be smarter, scale and grow bigger, âsaid Joe Ward-Wallace, South LA co-owner, who also spoke at the event.
The $ 2.65 million funding for the EOCF Los Angeles program comes from a grant from JPMorgan Chase to support five CDFI organizations led by various people working collaboratively who will administer and run the program with local small business borrowers.
The Los Angeles office of Local Initiatives Support Corporation (LISC LA), Accion Opportunity Fund (AOF) and Inclusive Action for the City (IAC) will each provide additional loan capital to meet the needs of borrowers in EOCF LA.
The other two organizations involved, the Vermont Slauson Local Development Corporation (Vermont Slauson) and the Pacific Asian Consortium in Employment (PACE) will provide technical assistance and advisory services to borrowers at EOCF Los Angeles.
âThe EOCF LA is a key part of the inclusive lending model we have for entrepreneurs who have been left behind,â said Tunua Thrash-Ntuk, executive director of LISC LA, who also spoke at the ‘event.
Thrash-Ntuk added, âPartnerships like this will enable many community actors to secure the resources to support small business owners as they seek to rebuild, improve their credit, increase their financial stability. and, hopefully, by the end of the journey, they will thrive on sustainable businesses. . “
EOCF Los Angeles funding is part of JPMorgan Chase’s $ 30 billion racial equity pledge that provides economic opportunities for underserved communities, especially Black and Latino communities, and fosters recovery inclusive economy by focusing on areas such as small business growth and financial health.
âWe know there is a great opportunity to inject more capital into businesses by partnering closely with local community organizations,â PorchÃ© said. âIt’s going to be difficult to rebuild our main streets after the pandemic, but one of the best ways to start rebuilding will be through programs like this. “