First Midwest Bank, U.S. Bank, The Coleman Foundation, Robert R. McCormick Foundation, The Chicago Community Trust and Providence Bank & Trust Join JPMorgan Chase and Fifth Third to Make New $3.6 Million Investment
In One Year, the Initiative Has Made Over 130 Loans in Chicago to Create More Economic Opportunities for Entrepreneurs of Color
Accion Chicago (Accion) and Local Initiatives Support Corporation (LISC) – the Entrepreneurs of Color Fund’s nonprofit partners in Chicago – today announced $3.6 million in new investments from six leading institutions: First Midwest Bank, U.S. Bank, The Coleman Foundation, McCormick Foundation, The Chicago Community Trust and Providence Bank & Trust. The new investments, which will be paired with business coaching and mentorship for small businesses, bring the total funding committed to the Entrepreneurs of Color Fund to over $9 million to support minority entrepreneurs on Chicago’s South and West sides.
The Entrepreneurs of Color Fund supports the work of nonprofit lenders Accion and LISC to provide capital to minority-owned small businesses and stimulate economic growth by boosting commercial activity and helping create jobs on the South and West sides. The initiative was launched in July 2018 with initial financial support from JPMorgan Chase and Fifth Third Bank.
“Small businesses are the backbone of our city’s economy, providing needed jobs, services, and opportunity to our families and residents in every neighborhood across Chicago,” said Mayor Lori E. Lightfoot. “The Entrepreneurs of Color Fund plays a critical role in driving small business growth in our communities, particularly those that have experienced generational disinvestment, and we are grateful to these newest funders for stepping up and doing their part as we expand access to capital, develop entrepreneurial skills, and truly unlock our city’s potential as a beacon of hope and opportunity for all.”
Small businesses are key drivers of growth, and that growth is fastest among minority and women entrepreneurs. In Chicago, small businesses employ more than 1 million people. Research shows it would require only a 9 percent increase in small business jobs, or less than one job per existing small business, to eliminate unemployment in Chicago’s low-income neighborhoods.
However, the financial resilience of small businesses varies across Chicago’s neighborhoods. The JPMorgan Chase Institute found that small businesses in many South and West Side neighborhoods have more limited cash reserves than their counterparts on the North side. For example, small businesses in Englewood are operating with less than a week of cash reserves in their deposit accounts compared to 17 days for small businesses in Buena Park – three times the cash liquidity of their Englewood peers.
“A key tenet of LISC Chicago’s economic development strategy is that power and wealth comes through ownership. Investing in local businesses and entrepreneurship is essential to creating community wealth and power and, is integral to supporting the communities we serve,” said Meghan Harte, Executive Director of LISC Chicago. “We are proud to be a partner of the Entrepreneurs of Color Fund and look forward to continuing working together to support minority-owned small business owners on the south and west sides.”
In its first year of operations in Chicago, the initiative has made over 130 loans totaling more than $1.7 million and resulting in nearly 400 new or preserved jobs. Fifty-three percent of the loans support minority women-owned businesses.
The new investments will enable the Entrepreneurs of Color Fund to build on insights gained during its first year to provide more minority entrepreneurs in Chicago with critical access to capital, coaching and other resources needed to support their small businesses.
“Chicago’s neglected neighborhoods need more jobs. Small business owners can create those jobs if they receive the loans and coaching they need to build their businesses,” said Brad McConnell, CEO of Accion Chicago. “That’s what Accion does, and that’s what this partnership is about.”
One of the small businesses that received a loan with support from the Entrepreneurs of Color Fund is Urban Roots, Inc., launched and managed by Jimmie and Tiffany Williams. The landscaping company serves residential, commercial and industrial properties across Chicago and helps to train people with criminal backgrounds with the skills that they need to connect with jobs after incarceration.
“The Entrepreneurs of Color Fund gave us the opportunity to grow and expand our business,” said Jimmie Williams, Entrepreneurs of Color Fund loan recipient and owner of Urban Roots, Inc. “Now, we can continue to offer our services across Chicago, help create more jobs in our neighborhood and give back to our community.”
A History of Impact
The Entrepreneurs of Color Fund was first launched in Detroit in 2015 by JPMorgan Chase, along with W.K. Kellogg Foundation and Detroit Development Fund, to provide minority-owned small businesses with access to capital and technical assistance. The fund has since tripled in Detroit to $22 million. In addition, the Entrepreneurs of Color Fund has expanded to San Francisco, the South Bronx, the Greater Washington region and Chicago as part of JPMorgan Chase’s $40 million, three-year commitment to the South and West sides of the city.
“Small business growth is key to creating economic opportunity for more people on the South and West sides,” said Charlie Corrigan, Head of Midwest Philanthropy at JPMorgan Chase. “At JPMorgan Chase, we are pleased to see businesses, nonprofits and political leaders come together to help minority entrepreneurs get a fair shot at achieving their dreams.”
Eligible entrepreneurs can run new or existing businesses, allowing more businesses to stay local and invest in their neighborhoods. These entrepreneurs are typically unable to qualify for traditional loans, often due to previous credit challenges, limited financial collateral, short business history or informal business practices.
Entrepreneurs seeking small business loans or coaching can contact Accion at 312-275-3000 or LISC at 312-422-9550.