The Entrepreneurs of Color Fund has backed more than 40 minority-owned businesses in the Motor City since 2015.
To ensure borrowers’ success, it provides support to entrepreneurs before and after lending and avoids standard measures of creditworthiness, like FICO scores. “It’s a model that works,” JPMorgan Chase’s Peter Scher, told Crain’s Detroit.
The Ralph C. Wilson Jr. Foundation, Fifth Third Bank and the Kresge Foundation joined existing investors JPMorgan Chase and the W.K. Kellogg Foundation to push the fund from $6.5 million to $18 million.
The fund was created in 2014 as part of JPMorgan Chase’s $100 million commitment to Detroit (since raised to $150 million); it is managed by Detroit Development Fund, a community development financial institution.
JPMorgan plans to replicate the fund in San Francisco and New York next year. “I think it just shows there’s a real market for these kind of resources,” Scher said.