Popular Fund for Minority-Owned Small
Businesses Attracts Expanded Investments from JPMorgan Chase and
W.K. Kellogg Foundation, Plus Support from New Funders Ralph C.
Wilson, Jr. Foundation, Kresge Foundation and Fifth Third Bank
Detroit Development Fund, JPMorgan Chase and W.K. Kellogg
Foundation today announced that the Entrepreneurs of Color Fund in
Detroit is attracting new investors and nearly tripling the fund’s
size from $6.5 million to over $18 million due to strong demand for
capital and a continued effort to help all Detroiters benefit from
the city’s comeback.
“Our Entrepreneurs of Color Fund has created great economic
opportunity for minority-owned small businesses in Detroit this
year,” said Ray Waters, President, Detroit Development Fund.
“This expansion of the fund will create countless new jobs and
bring new goods and services to even more neighborhoods in the
coming years.”
As part of JPMorgan Chase’s $150 million commitment to Detroit’s
economic recovery, in 2015, the firm, the W.K. Kellogg Foundation
(WKKF) and Detroit Development Fund (DDF) created a fund to provide
minority-owned small businesses with access to capital and
technical assistance. JPMorgan Chase originally invested $3.5
million and the Kellogg Foundation committed $3.5 million as part
of its larger roughly $25 million annual investment in the city and
commitment to promoting equity.
“We’re doing everything we can in Detroit to create more
opportunities for people of color and providing entrepreneurs
greater access to the small business capital they need to
succeed is helping us accomplish that,” said Mayor Mike
Duggan. “Detroiters who’ve opened or expanded a small business
already have created hundreds of jobs. We need more, so I'm
very grateful to JPMorgan Chase for encouraging investors to work
together and grow the Entrepreneurs of Color Fund, and for its
ongoing support in the revitalization of our city.”
To meet the ongoing demand of the successful fund, JPMorgan
Chase and the Kellogg Foundation each are making new investments of
$2 million and actively recruiting new funders to significantly
increase the size of the fund. New investors include the Ralph C.
Wilson, Jr. Foundation ($2.5 million), Fifth Third Bank ($3
million) and the Kresge Foundation which has committed to providing
first loss guarantee up to $2 million. All of these new investments
are expected to encourage other investors to support the fund.
“Thanks to this fund, minority-owned small businesses are
rebuilding homes, repairing streetlights and opening neighborhood
retail stores, and their entrepreneurial spirit is a big part of
Detroit’s continued comeback,” said Jamie Dimon, Chairman and
CEO, JPMorgan Chase. “When a fund like this is successful, we
want to help it reach more small businesses and that’s exactly what
we’re doing by encouraging investors to collaborate and taking this
model to help entrepreneurs in San Francisco and the South Bronx
next year.”
“The Kellogg Foundation developed and initiated this fund to
dramatically change the wealth trajectory of people of color in the
city and its neighborhoods,” said La June Montgomery Tabron,
WKKF’s President and CEO. “Our commitment to the Entrepreneurs
of Color Fund provides a pathway for community ownership, better
jobs and more opportunities. The goal is more equitable economic
development and an increase of quality of life for the people of
Detroit and their children.”
Created in 2015, the fund, which is facilitated by DDF, a
Michigan 501(c)3 Community Development Financial Institution
(CDFI), provides loans ranging from $50,000 to $200,000 as well as
business assistance to Detroit entrepreneurs of color, allowing
them to grow, hire locally and further contribute to the city’s
recovery. To date, the fund has lent or approved $4.5 million to
more than 43 minority small businesses, resulting in over 600 new
or preserved jobs. Fifty-three percent of the loans are supporting
minority women-owned businesses. Nearly three-quarters (70 percent)
of the loans have supported small businesses based in Detroit
neighborhoods.
The Fund is one way to ensure more Detroiters share in the
city’s continued economic recovery, and the unique and scalable
structure of the loan fund and technical assistance it provides has
become a model for how to help minority entrepreneurs expand in
other cities. In early 2018, JPMorgan Chase will launch similar
loans funds for minority-owned small businesses in San Francisco
and South Bronx, applying what the firm has learned from investing
in Detroit’s comeback.
There are approximately 50,000 minority-owned small businesses
in Detroit, making it the fourth largest city for minority
entrepreneurship. The fund is designed to increase economic
opportunity by providing these businesses with greater access to
capital and business assistance, allowing them to grow, hire
locally and further contribute to the city’s economic recovery.
“While access to capital is a critical piece of the puzzle for
many small business owners to grow and innovate, the connections
this fund provides to marketing, accounting and other business
services can also lead to long-term growth and sustainability” said
David Egner, President and CEO, Ralph C. Wilson, Jr.
Foundation. “We’re excited to join in this collaborative effort
to help DDF in its ability to reach and respond to even more of
Detroit’s ‘been-ups’.”
“Detroit’s full and inclusive recovery depends on its longtime
residents and small businesses having access to capital to launch
or expand businesses, create jobs, and spread economic vibrancy
throughout the city,” said Kresge President & CEO Rip
Rapson. “We’re proud to back this fund with a guarantee that
will do just that by unlocking millions of additional dollars.”
According to the JPMorgan Chase Institute, spending at Detroit
small businesses has grown significantly – from down over 4 percent
in early 2014 to up 4 percent in mid-2016. Nearly six in ten (58
percent) of consumer spending took place at small businesses in the
city, which is 20 percentage points higher than the average small
business spend across 14 other major U.S. cities.
“Building and maintaining strong communities is at the heart of
what we do,” said Greg Carmichael, President and CEO, Fifth
Third Bank. “We are very pleased to contribute $3 million to
Detroit’s Entrepreneurs of Color Fund to help minority small
businesses thrive.”
Anyone with questions about how to invest in the fund are
encouraged to contact Detroit Development Fund at (313)
784-9547.
About the Detroit Development Fund
DDF was established in 1996 with a mission to “improve the
quality of life for residents in underserved Detroit
neighborhoods.” A 501(c)(3) and certified as a CDFI, DDF
provides term loans and lines of credit to small businesses, small
contractors, and for-profit and nonprofit affordable housing
developers. DDF currently manages $23 million in loan capital.
Since lending activities began in 2002, DDF has closed over $36
million in loans to businesses in Detroit, which helped to retain
approximately 1,200 jobs and created approximately 1,800 new jobs.
Approximately 72 percent of DDF’s small business loans have been
made to minority owned companies, and over 1,400 housing units were
rehabbed as a result of DDF’s loans. DDF lending activities have
leveraged over $200 million in public/private investments with more
than $7 million in projects under management.
About JPMorgan Chase & Co.
JPMorgan Chase & Co. 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.
About the W.K. Kellogg Foundation
The W.K. Kellogg Foundation (WKKF), founded in 1930 as an
independent, private foundation by breakfast cereal pioneer Will
Keith Kellogg, is among the largest philanthropic foundations in
the United States. Guided by the belief that all children should
have an equal opportunity to thrive, WKKF works with communities to
create conditions for vulnerable children so they can realize their
full potential in school, work and life.
The Kellogg Foundation is based in Battle Creek, Michigan, and
works throughout the United States and internationally, as well as
with sovereign tribes. Special emphasis is paid to priority places
where there are high concentrations of poverty and where children
face significant barriers to success. WKKF priority places in the
U.S. are in Michigan, Mississippi, New Mexico and New Orleans; and
internationally, are in Mexico and Haiti. To learn more, visit
www.wkkf.org or follow WKKF on Twitter at @wk_kellogg_fdn.
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version on businesswire.com: http://www.businesswire.com/news/home/20171213005068/en/
Media:For JPMorgan Chase & Co.Stephanie
BoshStephanie.a.bosh@jpmorgan.comorDana
Linnanedana.linnane@wkkf.org
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