Source: New Jersey Business Magazine
$25 million to focus on Black- and Latinx-owned businesses, hard hit during the COVID-19 pandemic
Cherry Hill-based TD Bank announced the establishment of a $100 million equity fund in support of minority-owned small businesses, demonstrating its continued commitment to combat racial inequities and provide opportunity in underserved communities. TD Bank’s equity fund will enable Specialized Small Business Investment Companies (SSBICs) and Community Development Financial Institutions (CDFIs) to provide small business loans and technical assistance, ensuring these businesses have the resources they need to scale and adapt long-term.
$75 million of the capital will be funded through an SSBIC initiative, to be launched later this year. SSBICs provide financial assistance to disadvantaged businesses that are minority-owned, women-owned or are in areas of need. $25 million will be specifically earmarked for Black- and Latinx-owned small businesses, funded through CDFIs, which are notably skilled in helping businesses in communities of color secure financing.
“The pandemic has highlighted the depth of disparities that exist in communities of color, especially as it relates to small businesses, which serve as the backbone of our economy,” said Greg Braca, president and CEO, TD Bank, AMCB. “The equity fund will ultimately infuse capital and help stabilize these small businesses. But it’s also about contributing to job creation, stimulating economic development, revitalizing these vibrant communities and, just as important, breaking the cycle of disinvestment which systemically prevents communities of color from thriving. Small businesses are the heart of our communities – especially communities of color – and it’s up to us to help them succeed.”
The equity fund stems from a larger commitment made by TD Bank Group last year to advance racial equity for its Colleagues, Customers and Communities. As part of that commitment, TD Bank pledged to establish ways to better support minority-owned businesses. Many of these businesses, particularly Black- and Latinx-owned, were already experiencing financial fragility due to underlying systemic challenges faced by underrepresented groups, a situation that was exacerbated during the pandemic.
“We hope that our investment in these SSBICs and CDFIs serves as a means of making access to capital more equitable for minority small business owners. But our support doesn’t end there,” said Michael Innis-Thompson, Head of Community Lending and Development at TD Bank. “TD has always helped sustain small business owners. For instance, we’ve long supported CDFIs through philanthropic grants and access to capital for loans, providing them with the liquidity to offer low-interest, micro-loans to businesses that may not have qualified for traditional lending due to barriers commonly faced, especially by Black and Latinx small business owners. Additionally, TD will continue its practice of referring customers to a CDFI when we can’t underwrite a loan, because at the end of the day, we want these vital businesses to succeed – it’s what differentiates us as a purpose-driven bank.”
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