In 2015, JPMorgan Chase made a $6.5 million commitment to Detroit’s financially underserved minority small business owners as part of a $150 million investment in the city.
The bank nearly tripled the fund size in Detroit in December and has now launched similar, though smaller, funds in San Francisco and New York’s South Bronx in partnership with local organizations. The $3.1 million fund in San Francisco will be managed by Working Solutions, ICA Fund Good Jobs and Pacific Community Ventures. Excelsior Growth Fund and Accion are the bank’s partners in the $2 million fund in the South Bronx.
JPMorgan’s funds take different approaches based on local need. In Detroit, much of the focus has been on rebuilding entrepreneurial activity and infrastructure, whereas in San Francisco the fund will focus on helping small businesses remain in the area as rents and other costs increase, Pacific Community Ventures’ spokesman Patrick Duggan told ImpactAlpha.
Since JPMorgan launched the Detroit fund in partnership with the Kellogg Foundation in 2015, $4.7 million has been loaned to 45 minority-owned small businesses, which JPMorgan says has created or preserved 600 jobs.
Other lenders are coming around to the job creation potential and financing needs of entrepreneurs of color. Morgan Stanley partnered with the Urban League on its two $8 million Capital Access Funds for minority entrepreneurs in Cleveland and Fort Lauderdale. Living Cities recently backed Propeller’s venture fund in New Orleans as one of its initiatives to end racial disparities in the US. “There needs to be a massive investment in businesses [founded by] people of color for our entire economic engine to keep going,” Living Cities’ Ellen Ward says.