Coffee giant Starbucks is presenting $10 million to four community development groups in Chicago, a move to spur economic growth and loans to small businesses in the city’s underserved neighborhoods.
The money will be distributed to Accion Chicago, Chicago Community Loan Fund (CCLF), Local Initiatives Support Corporation (LISC), and IFF. The four community development financial institutions (CDFIs) will use the investment to help finance more than 500 loans to small businesses in the Windy City.
Community development groups often use the funding they get from investors to offer support and financing to businesses that perhaps cannot access capital from mainstream financial institutions such as banks.
“We believe the pursuit of profit is not in conflict with the pursuit of doing good,” Starbucks CEO Kevin Johnson stated in a press release. “We know that our business performs at its best when the communities we serve are thriving. This sustained investment will provide borrowers who often face barriers with access to capital and mentorship to grow their business and create more jobs in Chicago.”
Mayor Lori Lightfoot applauded Starbucks’ commitment to her city. “Chicago’s own relationship with Starbucks stretches over three decades, and we are incredibly excited to continue that partnership well into the future, through the 200 new jobs created in the beautiful new Reserve Roastery, as well as across our neighborhoods that aligns to our new INVEST South/West initiative, as we work together to drive investment and access to opportunity for every one of our city’s residents and families.”
Bank of America will help Starbucks in dispersing the investment to the four lenders. The CDFIs are expected to start making loans to small businesses and community groups by early 2020, but borrowers can apply for loans now. Starbucks reports Chicago residents can apply for loans by visiting the respective CDFI websites.
Starbucks joins other big companies that have made investments to support Chicago’s underserved communities. In December 2018, Black Enterprise reported JPMorgan Chase & Co. is investing $10 million that will provide real estate for black business development in Chicago. The commitment means Chicago entrepreneurs will gain access to affordable space in the underserved neighborhoods of Chicago’s West and South sides. The nation’s largest bank is lending the money to the Chicago Community Loan Fund (CCLF), a nonprofit lender that backs commercial real estate development and helps small businesses obtain financing to finance projects.