Access to capital continues to be an issue in underserved communities. The African American Chamber of Commerce of New Jersey and New Jersey Community Capital are trying to fix that.
The two groups announced Thursday the formation of the Equitable Small Business Initiative, a $5 million commitment to bring capital to small business enterprises in the state. The initiative will focus support for Black-owned businesses most affected by the COVID-19 pandemic.
The partnership is a first-of-its-kind collaboration between a community development financial institution and a New Jersey-based chamber of commerce. Eligible and interested small business owners can apply for a loan starting April 1.
AACCNJ head John Harmon said the program is of urgent need.
“Through this collaboration, we will be responding to the call of business owners who desperately need resources to meet their objectives; this is the right partnership to make a difference,” he said.
The numbers bear that out.
According to the National Bureau of Economic Research, the number of active Black businesses experienced a 41% drop between February and April, challenged by limited access to financing to sustain operations.
NJCC President Wayne Meyer said the Equitable Small Business Initiative builds on the longstanding commitment of NJCC and the AACCNJ to help address systemic inequities and support the needs of underrepresented communities.
“Although our work at NJCC has always been rooted in racial, economic and social justice, it is incumbent upon us to ask what more we can do to promote opportunity and equality,” he said. “The Equitable Small Business Initiative addresses opportunity gaps for Black small business enterprises in the state of New Jersey by building a more equitable lending ecosystem to improve economic opportunity, create jobs and support a more just economy where even the most vulnerable communities thrive.”
Black-owned small businesses have faced historical challenges in securing access to capital, contributing significantly to limited financial health, startup capital and access to credit and profitability. The economic downturn of the COVID-19 pandemic has further exacerbated these financial challenges.
The Equitable Small Business Initiative provides a holistic set of resources to help address the immediate financial needs of small businesses and provide a pathway towards long-term sustainability. Accepted candidates are eligible to receive additional resources for their businesses, including high-touch and individualized technical assistance, capacity building and administrative support.
The initiative is supported by investments from the Pascale Sykes Foundation (the initial investor), the New Jersey Pandemic Relief Fund and the Robert Wood Johnson Foundation.
Frances Sykes, CEO of the Pascale Sykes Foundation, said her group is eager to help.
“Black-owned small business owners across the state are facing far too many challenges and are in need of immediate assistance to help recover from the effects of the pandemic,” she said. “NJCC and AACCNJ are uniquely positioned to provide much-needed access to capital for recovery and resiliency during these uncertain times.”