Expanding Access to Capital
On a National Scale
With small businesses growing fastest among people of color, particularly Latinas and African-American women, it’s essential to help them get started and growing. When small businesses succeed, our communities and neighborhoods succeed.
That’s why, in 2016, JPMorgan Chase more the doubled the size of our Small Business Forward global philanthropic initiative, committing $75 million over the next three years to support women-, minority- and veteran-owned small businesses.
As part of this initiative, we are applying the lessons we learned in Detroit about the critical importance of building capital bridges for underserved entrepreneurs by supporting a variety of efforts across the United States that are working to advance that goal.
“Not everyone can access a traditional loan. It is crucial to make it faster and easier for small businesses to connect with local CDFI partners devoted to providing targeted capital and trusted guidance. This supports our vision to change the way capital and services flow to Main Street.”
Accion U.S. Network
JPMorgan Chase launched a $1 million partnership with Accion U.S. Network aimed at enhancing access to capital for women and minority entrepreneurs. A critical part of the partnership is a multi-year review of the portfolios of Accion Network members and Opportunity Fund to gain better insight into the long-term impacts of small business microlending. In addition, the Accion members are co-creating new technology that will streamline their lending businesses. To aid in this effort, JPMorgan Chase also provided $2.1 million to four Accion organizations to support their lending activity.
LiftFund’s LiftUP Initiative
In 2016 JPMorgan Chase invested in LiftFund, a nonprofit that helps small businesses with limited access to capital. The nonprofit lender provides small business loans and minority-business loans for women, startups and entrepreneurs, as well as essential technical assistance. With a $4.6 million commitment to its new LiftUP Initiative, the loan fund will offer faster and cheaper loans to small business owners in Dallas, Houston, Austin, San Antonio, New Orleans and Atlanta through a new web-based program that will reduce loan approval time from an average of five weeks to four days.
Association for Enterprise Opportunity
Research shows that individuals who get personally referred for a bank loan are far more likely to get financing over those without referrals. To help scale the power of these kinds of personal connections, JPMorgan Chase committed $1.9 million to the Association for Enterprise Opportunity (AEO), a trade organization whose mission is to support underserved entrepreneurs. The funding will help advance AEO’s digital referral platform, which connects small businesses to trusted community development financial institution (CDFI) lenders when the owners are unable to qualify for traditional loans.
Q&A What are the keys to an inclusive entrepreneurship?
Nely Galán: Many women of color don’t have experience with the financial system in the United States. Many Latinos come from countries where the banking system has collapsed. I started a business at 25, and I didn’t make one penny for four years. Then I found a banker who looked like me and started asking questions. I began going to classes at the Chamber of Commerce, networking and joining organizations for small business owners. I started meeting people and building relationships. It was only then my business took off. Power is not given to us — we have to go take it.
Nely Galán is the former president of entertainment at Telemundo, making her the first Latina head of a major network. An Emmy award-winning television producer, she has owned her own media company since 1994. As a self-made media mogul, Galán has made it her mission to teach women how they too can become entrepreneurs. She is the author of “Self Made: Becoming Empowered, Self-Reliant, and Rich in Every Way,” a manifesto to unite all women on a quest for an economic future they control. She is also the founder of the Adelante Movement, a digital platform that seeks to elevate the entrepreneurial spirit and skills of Latinas.
Beverly Johnson: It’s crucial to understand the importance of and the barriers to accessing capital. This is a key element to success. People think they can go out and start a business on their own, but all of a sudden they are against the wall. But information is power: There are grants, loans and government supplier diversity programs for people who want to start their own business. Many people of color know they exist, but we just weren’t invited to the table. So it’s important to surround yourself with a team of entrepreneurs, mentors and partners who know how to get capital.
Beverly Johnson is the first African-American supermodel. Her stunning features eventually landed her on the cover of Vogue in August 1974, making history as the first black model to ever grace the acclaimed magazine’s cover and forever changing the beauty ideal in the fashion world. Johnson is a founder, chairwoman and CEO of BJE LLC. Her vision is to build BJE (Beverly Johnson Enterprises) into the multibillion-dollar global brand The Beverly Johnson Luxurious Lifestyle Brand, which represents the highest-quality luxurious products in media, fashion and hair, beauty and cosmetics to the global multicultural market for women of all colors.
The Data on Minority-Owned Small Businesses
For many aspiring entrepreneurs, starting — and keeping afloat — a small business can present insurmountable obstacles. This is especially true for minority-owned businesses, which have less access to flexible financing and the support services that are so critical to success. Only 16 percent of conventional small business loans go to women entrepreneurs, and despite the higher startup rate of African-American-owned businesses, these businesses received less than 2 percent of Small Business Administration loans in 2013, down from 8 percent before the recession.
A 2016 report by JPMorgan Chase and the Initiative for a Competitive Inner City (ICIC) found that women and minorities are significantly underrepresented in high-tech incubators and accelerators, and cited intentional exclusivity, a lack of outreach and inherent biases in the selection process as the strongest barriers to diversity. Yet minority-owned small businesses are critical to revitalize local economies: ICIC also reported that small businesses in America’s inner cities are the primary drivers of job creation and employment rates