First of a two-part series
If you ask fledgling minority business owners what stands among their most significant challenge to success, they’ll inevitably refer to the lack of access to capital needed to either sustain or increase their daily operations.
But for those hanging their shingles in the DMV, the horizon looks brighter with the recent launching of a unique partnership between the Washington Area Community Investment Fund (Wacif), JPMorgan Chase and others, formed to help underrepresented communities seize economic opportunity and greater equity, while lowering barriers that have historically obstructed their inclusion among other more viable businesses.
D.C. Mayor Muriel Bowser weighed in after the announcement of the initiative.
“Together, by expanding access to capital and supporting our local entrepreneurs, we’re giving more Washingtonians a fair shot,” Bowser said. “Small and local businesses are not only the backbone of our economy, they are also an opportunity for our residents to participate in D.C.’s prosperity. By expanding the Entrepreneurs of Color Fund to Washington, D.C., JPMorgan Chase will support the local work we are doing to create pathways to the middle class for residents across all eight wards.”
Ted Archer, head of Small Business Forward for JPMorgan Chase, and who runs the Entrepreneurs of Color Fund, said echoed the mayor’s comments, providing insight on how the program’s partners will assess its success.
“We plan to measure success by how much capital we are able to deploy, how many jobs we can help create or save and how much additional capital we can attract to this Fund,” he said. “For example, in Detroit, we were able to grow the Entrepreneurs of Color Fund from $6.5 million to $22 million and have deployed more than $7 million in capital so far to create or save 836 jobs in the communities. Nationally, we’ve been able to create Funds totaling $39 million and combining for more than 210 loans deployed to minority-owned small businesses, with only one loan default.”
“We know that one of the most important ways to create inclusive growth in a community is by helping small businesses grow and closing the entrepreneurship gap. For example, according to the Institute for Competitive Inner Cities, if every small business in D.C. created just one job, it would be eliminate inner city unemployment,” Archer noted.
But what motivated JPMorgan Chase to “put its money where its mouth is” and focus on the needs of minority business owners?
“Investing in minority-owned businesses is one of the most effective ways we can drive job growth and economic opportunity in the region,” he said. “The Greater Washington region is thriving but opportunity is not shared equally. With the Entrepreneurs of Color Fund, we are bringing a proven model that expands access to capital across our region and will help ensure that more people have a chance to participate in our growing economy, especially in Wards 7 and 8.”
“The opportunity to drive economic growth by investing in Black families and businesses is real. Nielsen found Black consumers have $1.2 trillion in buying power. According to Global Policy Solutions, if people of color owned businesses at the same rates as white entrepreneurs, it would result in 9 million more jobs and $300 billion in worker income. According to the Association for Enterprise Opportunity, if Black-owned businesses could reach employment parity with all firms, they would create nearly 600,000 new jobs and put black job-seekers at full employment,” Archer said.
As JPMorgan Chase expands the program into the Greater Washington region, they will seed the loan fund with a commitment of $3.65 million, alongside a $2 million commitment from Capital Impact Partners and a $1 million investment from the A. James & Alice B. Clark Foundation – a total of $6.65 million. As for their track record, the effort in the DC area builds on existing Entrepreneurs of Color Funds in Detroit where the program initially began in 2015, to other cities including Chicago, San Francisco and the South Bronx.
Capital Impact Partners President Ellis Carr says entrepreneurs of color in the D.C. region have plenty of ideas but “they just need a catalyst to see those ideas realized.”
For Wacif Executive Director Harold Pettigrew, providing equity stands as the most essential benefit to new entrepreneurs ready to dive in and transform their dreams into reality.
“Equity is at the center of our work and to deepen Wacif’s impact regionally, we need bold, new strategic partnerships,” he said. “The Entrepreneurs of Color Fund will advance our efforts to make entrepreneurship more inclusive and provide small businesses with the capital needed to accelerate their growth throughout the Washington, D.C. and Baltimore regions.”
Archer says he’s optimistic about the potential success stories that will develop, particularly in Wards 7 and 8, as more people hear about the Fund.
“JPMorgan Chase has been growing our presence in the Washington, D.C. region for nearly 20 years and [it’s] one of the fastest growing in the country,” he said. “However, not everyone is sharing equally in the region’s growth, especially areas East of the River.
“Research shows that neighborhood conditions directly impact economic outcomes for local residents and, with significant income and employment disparities in Ward 8 paired with high poverty rates and rising housing prices, there is a substantial threat to the stability of the communities along the Anacostia River.”
“We have committed $25 million in philanthropic investments to the D.C. region, helping people develop skills for in-demand jobs, helping minority-owned businesses expand and revitalizing neighborhoods and improving consumer financial health. In 2018, we also started expanding branches in D.C. with 20 percent of those branches in low- and moderate-income communities where we will be hiring up to 700 jobs with a minimum wage of $18 an hour and full benefits. That expansion will continue and will be critically important in our efforts to expand small business and home lending into communities like Wards 7 and 8.”
Next week in part two of this series, we’ll share the perspectives of one local, African-American female entrepreneur, Kia Weatherspoon, who has received financial and technical assistance as well as other forms of guidance and mentorship from Wacif and its partners since founding her own business, Determined By Design, in 2012.