JPMorgan Chase Commits $350 Million to Grow Black, Latinx and Women-owned Small Businesses
Firm invests $42.5 million to expand successful Entrepreneurs of Color Fund to more U.S. cities and introduces data-driven policy solutions to increase access to capital for historically underserved entrepreneurs
NEW YORK, February 25, 2021— Today, JPMorgan Chase announced a new $350 million, five-year global commitment to grow Black, Latinx, women-owned and other underserved small businesses, help address the racial wealth divide and create a more inclusive recovery from the COVID-19 pandemic.
The pandemic has exacerbated historic challenges for Black, Latinx, women and other underserved small businesses to access necessary capital to sustain and grow. According to the JPMorgan Chase Institute, Black, Latinx and women-owned small businesses are underrepresented among firms with substantial external financing, limiting opportunities to scale their business. Further, financial challenges faced by Black and Latinx small businesses are more substantial relative to white-owned businesses, meaning they are especially vulnerable in today’s environment.
This new commitment, which combines low-cost loans, equity investments and philanthropy, will help reduce barriers to capital for underserved small businesses to support their immediate needs and long-term growth. More than 40% of the commitment will be low-cost loans and equity investments, removing a critical barrier for Black, Latinx, women and other underserved entrepreneurs.
The investment is part of JPMorgan Chase’s $30 billion commitment to provide economic opportunity to underserved communities, especially the Black and Latinx communities, by harnessing its business, policy, data and philanthropic expertise.
“Black, Latinx and women entrepreneurs face historic challenges to accessing the capital and other resources needed to keep their doors open during the pandemic and ultimately have the opportunity to grow long-term,” said Jamie Dimon, Chairman and CEO, JPMorgan Chase & Co. “Now more than ever, business has a responsibility to help solve societal problems. We’re pulling together our business resources, philanthropy and policy expertise to address the racial wealth gap, give underserved small businesses the support they need to grow, and build a more inclusive economy.”
JPMorgan Chase’s new five-year, $350 million global commitment will help reduce barriers to capital access and grow thousands of additional underserved businesses by:
- Low-Cost Loans and Equity Investments: Providing low-cost, long-term capital and technical expertise to more underserved entrepreneurs in the U.S., including expanding the Entrepreneurs of Color Fund to new U.S. cities and making direct equity investments in early-stage businesses to drive economic opportunity, including in Black and Latinx communities.
- Policy Solutions: Releasing new data-driven policy solutions through the JPMorgan Chase PolicyCenter to improve Small Business Administration (SBA) programs, including the Community Advantage, government procurement and Small Business Investment Company (SBIC) programs, to better meet the needs of minority- and women-owned small businesses.
- Philanthropy: Making philanthropic investments to build the capacity of diverse-led nonprofits across the globe to more effectively support entrepreneurs, and support the signature Ascend Program, currently active in 13 cities, to provide underserved entrepreneurs with business education, consulting services and partnerships with anchor institutions.
Together, these initiatives will help improve access to capital for Black, Latinx, women and other underserved entrepreneurs and address the racial wealth divide.
JPMorgan Chase first launched its Small Business Forward initiative in 2015. Over the last five years, the firm has provided more than $200 million in philanthropy, including $20 million in COVID-19 relief, to support underserved small businesses in cities around the world. These funds provided access to capital and technical support to more than 1 million diverse small businesses, which have raised nearly $10 billion in capital and increased revenue by an average of 22%
Expanding the Entrepreneurs of Color Fund
In collaboration with Local Initiatives Support Corporation (LISC) and a network of CDFIs, JPMorgan Chase is investing $42.5 million in low-cost loans and philanthropy to expand the Entrepreneurs of Color Fund, which currently operates in five U.S. cities. This commitment will scale the Entrepreneurs of Color Fund program to reach new U.S. cities in 2021 with the goal to create a nationwide program providing low-cost loans and technical assistance to minority-owned small businesses through CDFI partners over time.
The program aims to assist over 3,000 small businesses by attracting capital from additional investors and applying lessons learned investments in other cities.
“Even in strong economic times, minority-owned businesses are more likely to struggle to access appropriate financing than their white counterparts,” said Steve Hall, Senior Director of Small Business Lending, Local Initiatives Support Corporation (LISC). “That not only affects owners and their families; it means the communities where they operate have more limited access to goods, services, jobs and economic growth. JPMorgan Chase is helping bridge that gap, while also helping these entrepreneurs prepare to successfully emerge from the losses of the pandemic.”
Since its inception in Detroit in 2015, the Entrepreneurs of Color Fund has provided over 1,200 loans and deployed more than $32 million in capital to Black, Latinx and other underserved entrepreneurs, including Jimmie Williams from Chicago, who received a small business loan to scale his landscaping company. The program has grown to include a network of 12 CDFIs in five metro areas including Detroit, the Bay Area, South Bronx, Chicago and the Greater Washington DC area.
The Entrepreneurs of Color Fund is an example of cities as laboratories of innovation, where one pilot program, tested in a handful of cities over time, can be scaled to support small businesses in communities across the country.
Advancing Data-Driven Policy Solutions to Reform Federal Programs
The JPMorgan Chase PolicyCenter released new data-driven policy recommendations to address immediate and long-term needs of underserved small businesses, particularly minority and women-owned small businesses. Among its recommendations, the firm is advocating for:
- Increasing resources for the Small Business Administration (SBA) Microloan program, which provides loans of up to $50,000 to help small businesses start up and grow to scale, to reach more underserved entrepreneurs representing the smallest businesses;
- Making permanent the SBA Community Advantage program, a pilot program to meet the credit needs of underserved markets that is set to expire in 2022;
- Increasing the Department of Treasury’s CDFI Fund to $1 billion with a set-aside for Black-led CDFIs in order to boost economic revitalization in underserved communities;
- Improving government procurement programs and policies to provide greater opportunity for underserved small business owners to secure government contracts;
- Creating a stable source of federal funding for state and local governments to provide local small businesses with relief loans and grants.
The firm will put its weight behind advancing these policy reforms, informed in part by the JPMorgan Chase Institute’s distinctive research, to support the long-term survival of underserved small businesses.
JPMorgan Chase’s $30 Billion Commitment to Advance Racial Equity
In October 2020, JPMorgan Chase announced a $30 billion commitment over five years to provide economic opportunity to underserved communities, especially the Black and Latinx communities, and drive an inclusive economic recovery. The firm is continuing to put this commitment into practice and help address the racial wealth divide by combining our business, policy, data and philanthropic expertise. The firm’s recent efforts include:
- Providing $40 million in direct equity investments and commitments to Black-led minority depository institutions (MDIs) and diverse-led CDFIs;
- Creating an Empower share class to help bridge the gap between institutional clients and MDIs and CDFIs by providing them with the ability to distribute our money market funds to drive new, recurring revenue streams;
- Investing up to $200 million in Ariel Alternatives and Project Black, which aims to close the racial wealth gap by investing in middle market businesses that are minority owned or will become minority owned;
- Advancing data-driven policy solutions to provide immediate economic relief and drive an inclusive recovery for those struggling the most.
About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $3.4 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.
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