To help support Black and Latino entrepreneurs on Chicago’s South and West sides, PNC Financial Services is providing capital to a new fund run by local community lender and small business development organizations.
Through the PNC Foundation, the Pittsburgh-based bank announced Wednesday that it is providing a $1.5 million grant to help launch the Community Micro Equity Fund, which is managed by Sunshine Enterprises and Greenwood Archer Capital, formerly known as Chicago Neighborhood Initiative Micro Finance Group.
The Micro Equity Fund will connect more than 200 qualified business owners and entrepreneurs with equity investments up to $25,000. The Equity Fund investments aim to ease financial burdens for business owners by not requiring they start to be repaid until after two years. At the start of the third year, business owners will begin to repay about 20% of the investment at face value until paid off or converted to traditional debt. Money repaid to the fund will be recycled into new investments. The fund is expected to create 700 jobs over the next three years.
“This initiative will provide that much-needed capital to empower Black and diverse entrepreneurs and small business owners,” said Scott Swanson, PNC’s regional president for Illinois, at a news conference announcing the fund. “This is really the most comprehensive approach that we’ve ever taken to truly ensure sustainability and success.”
To qualify for loans, participants will need to complete a formal vetting process through Greenwood Archer Capital or a 12-week business planning and management program offered by Sunshine Enterprises.
In the Sunshine program, participants will learn about credit, marketing, bookkeeping and cash flow. Sunshine Enterprises Executive Director Joel Hamernick said the program has already graduated more than 1,000 students since its inception.
“There’s a lot of folks who talked a lot last year and made pledges about how they were going to stand up and support communities, but a lot of those folks that had the words and the mission statements haven’t delivered. PNC has,” said Mayor Lori Lightfoot at the news conference.
PNC’s grant to the Community Micro Equity Fund is part of a larger commitment the bank made last summer to dedicate $1 billion to help end systemic racism by providing more economic resources to Black and low-income communities. So far, the bank says it has provided $45 million to other financial empowerment and community development initiatives.
The news comes shortly after Greenwood Archer Capital expanded the size of its loans to Black-owned small businesses in Chicago. Over the last 1.5 years, the organization, led by President Erica King, raised $8 million from institutional banks, including PNC, but also others like Wells Fargo, PayPal and U.S. Bank.
As a result, Greenwood Archer Capital was able to double its loan capacity from $100,000 to $200,000.
Source: chicagobusiness.com
