December 12, 2018 (Chicago, IL) – JPMorgan Chase is committing $10 million in long-term, low-cost capital to support the sustainable development and preservation of small business and commercial corridors on Chicago’s South and West sides. This new capital will expand economic opportunity by enabling Chicago Community Loan Fund (CCLF) to finance critical projects that lack access to traditional financing, providing local residents with access to everyday goods and services.
This capital complements and builds on JPMorgan Chase’s $40 million, three-year philanthropic commitment to Chicago’s South and West sides, and leverages the firm’s community development banking expertise in addition to learnings from its proven investment model in Detroit.
The announcement was made today at an event on the South side with senior business, community and government leaders, including JPMorgan Chase Chairman and CEO Jamie Dimon, CCLF President Calvin Holmes, and Illinois Governor-elect J.B. Pritzker, among others.
“We want our support for the South and West sides to be sustainable and to encourage others to see the benefits of investing here too,” said Jamie Dimon, JPMorgan Chase Chairman and CEO. “The partnership between government, business and the community will help ensure this investment goes where it is needed most – helping those who have not benefited from Chicago’s growth.”
“Creating economic opportunity and prosperity in every community is at the top of my agenda, and I welcome companies like JPMorgan Chase making investments in neighborhoods across Chicago,” said Governor-elect J.B. Pritzker. “We can lift up communities that have been left behind when we work together to promote economic growth, innovation, and collaboration between the public and private sectors.”
$10 Million Commitment through AdvancingCities
JPMorgan Chase Institute research found that residents on Chicago’s South and West side neighborhoods must travel greater distances to access everyday goods and services. For instance, in the South Shore and Pullman neighborhoods on the South side, residents traveled 4.9 and 4.6 miles, respectively, from home for the typical purchase, while residents in the North side’s West Ridge and North Park traveled only 1.9 and 1.6 miles. In addition, research by Boston Consulting Group’s Center for Illinois’ Future and JPMorgan Chase found that introducing equity and other patient capital would be critical in boosting investment in neighborhoods that lack access to capital.
The new, low-cost long-term capital will enable CCLF to create sustainable loan programs and attract additional outside capital through its “Activate Retail” brand for the preservation and development of local commercial real estate and to spur small business growth and local job creation.
It is the first loan made under the $500 million AdvancingCities initiative, of which up to $250 million will be low-cost, long-term capital. This capital combines the firm’s philanthropic efforts with the lending and investing expertise of its Community Development Banking business to maximize its impact in Chicago.
JPMorgan Chase’s Commitment to Chicago
In 2017, JPMorgan Chase announced a $40 million, three-year commitment to create economic opportunity on Chicago’s South and West sides. So far, the firm has deployed over half of this pledge using its philanthropic investment model for impact to build jobs, expand small businesses, revitalize neighborhoods and promote financial health.
Over the past year:
- JPMorgan Chase launched a $5.5M Chicago Entrepreneurs of Color Fund which has already closed 37 loans to West and South side small businesses;
- Instituto College welcomed the inaugural class of 30 students into its Associate's Degree in Nursing program in fall 2018;
- Neighborhood Housing Services has helped improve the average credit score by 12 points, increase savings by $2,329 and resulted in debt reductions of $4,185 for Chicagoans; and
- JPMorgan Chase provided seed funding to Community Investment Corporation to launch the Chicago Opportunity Investment Fund, which has already preserved 176 units of mixed-income housing, of which 38 are dedicated as affordable units.
A Long History of Collaboration between JPMorgan Chase and CCLF
The $10 million commitment to CCLF will build on the long-standing collaboration between the two organizations, including through JPMorgan Chase’s national PRO Neighborhoods initiative. Financial commitments and technical assistance from JPMorgan Chase have helped CCLF more than double its total assets to $87 million, and this new commitment is expected to accelerate the process of CCLF reaching its goal of $100 million in assets by 2020.
“This new investment propels CCLF’s strategic commitment to increase commercial retail in low-income neighborhoods in Chicago,” said Calvin L. Holmes, CCLF President. “This substantial infusion of capital by JPMorgan Chase will allow our borrowers to generate jobs for local residents and help their entrepreneurial tenants of color dismantle barriers to their economic empowerment.”
A 2016 $3.5 million philanthropic investment to CCLF and Chicago Neighborhood Initiatives has enabled 16 microloans totaling $532,000 to small businesses, leveraging an additional $848,000 in private and public financing and another $400,000 in financing for a new community center in the Pullman retail corridor.
Since 2014, JPMorgan Chase has provided Chicago CDFIs (Community Development Financial Institutions) with over $13 million in philanthropic capital to support the development and preservation of commercial real estate, small business and affordable housing in underserved neighborhoods in Chicago.
Finally, JPMorgan Chase’s Service Corps has deployed over 30 employees to date in three-week pro bono engagements in Chicago. The Service Corps has completed two projects with CCLF since 2017, which have helped the organization develop and enhance vital financial models to support their growth. The first project created an improved liquidity model, resulting in substantial cost savings for CCLF’s operations. The second created a more efficient pricing model for CCLF loans to help maximize its impact on local communities.
Applying Insights from Detroit
The $10 million commitment to CCLF applies learnings from JPMorgan Chase’s success in Detroit, where $40 million in low-cost capital supporting CDFIs were leveraged to deploy over $233 million from outside investors (4:1 ratio). In Detroit, the capital is being reinvested into critical projects in local neighborhoods. These investments have helped create 828 residential units, 296,000 square feet of commercial space and created or saved 538 jobs.
About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.6 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of customers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
Founded in 1991, Chicago Community Loan Fund is a federally certified Community Development Financial Institution (CDFI) providing flexible, affordable and responsible financing and technical assistance for community stabilization and development efforts and initiatives that benefit low- to moderate-income neighborhoods, families and individuals throughout metropolitan Chicago. To-date, CCLF has closed 461 loans totaling over $194M in financing that has leveraged an additional $1.3B in public and private sector capital for community projects. For more information, please visit cclfchicago.org.