NEW ORLEANS – On June 30, local community development financial institutions NewCorp Inc. and TruFund Financial Services Inc. announced a new collaboration with the Entrepreneurs of Color Fund aimed at expanding access to capital and other resources to minority-owned businesses in the crescent city.
The EOCF is a program managed by the Local Initiatives Support Corporation and largely supported by investment from JPMorgan Chase. The EOCF is designed to not only get much-needed capital directly into the hands of African American, Latinx, and other small business owners, but to also provide critical support such as coaching, operational guidance, and training. In addition, through a specialized loan fund, the EOCF also purchases participations in previously originated minority business loans from designated CDFI partners to free up capital for additional lending to entrepreneurs of color.
“The New Orleans Business Alliance has been engaged in partnership with these two CDFIs since the 2019 launch of its InvestNOLA initiative, through which Newcorp and TruFund are directly responsible for deploying more than $12 million in capital to local business owners of color. NOLABA was thrilled to facilitate their access to the Entrepreneurs of Color Fund that will further increase the lending capacity of both CDFIs,” said Norman E. Barnum, IV, president and CEO of NOLABA.
“Creating a more equitable and inclusive economy is what this partnership is all about,” said Greg Rattler, a market leader for JPMorgan Chase in New Orleans. “Together, we will open doors of opportunity for black and brown business owners who can build wealth for their families and generations to come.”
The EOCF helps entrepreneurs of color start, sustain, and grow their businesses. Too often, African American and Latinx businesses run into obstacles in raising money and struggle to secure loans or to come up with sufficient working capital to fund their ideas. They have been underrepresented among enterprises that grow using external financing (financing through household savings, social networks, or bank financing), and they have fewer opportunities to build businesses with a scale-based competitive advantage.
“The Entrepreneurs of Color Fund will nurture a diverse landscape of small businesses that reflect New Orleans’ rich culture and history,” said Steve Hall, vice president with the Local Initiatives Support Corporation. “The EOCF can help bridge capital gaps that constrain growth for minority owners and, in the process, support wealth-building for Black and Brown families, job creation throughout the city, and a more equitable local economy, where everyone has the chance to succeed.”
“The EOCF provides innovative solutions that will create access to affordable capital for minority business owners,” said James H. Bason, president and CEO of TruFund Financial Services Inc. “We strongly believe that access to capital is critical to growing resilient small businesses and sustaining vibrant communities. This partnership moves us beyond the power of one to the power of collaboration to foster inclusive economies and help close the racial wealth gap.”
The announcement of the EOCF comes as the Essence Festival returns to the city of New Orleans for the first time in two years, bringing millions of people to the city. Essence Festival’s historic focus on empowering people and businesses of color aligns with the EOCF’s commitment to helping break down systemic barriers that have historically limited the growth of minority businesses.
“NewCorp has afforded an opportunity for disadvantaged businesses to participate in the capital market for 25 years through non-traditional lending methods that are debt-based; however, we have not been in a position to fund a significant amount of these businesses,” said Vaughn Fauria, president and CEO of NewCorp. “This collaboration between NewCorp, TruFund and LISC is an inspiring blend of purpose that will deliver on the promise to change the game for BIPOC businesses. The best collaborations create something bigger than the sum of what each person or organization can create on their own.”