Brooklyn, NY – TruFund Financial Services, Inc. has been selected as one of two community development financial institutions, along with Brooklyn Alliance Capital and Brooklyn Chamber of Commerce to unveil a series of loans to help Brooklyn’s BIPOC business owners get back on their feet post-pandemic and support equitable economic momentum in Brooklyn, the Foundation’s leadership announced today. The Social Justice Fund is made possible through a ten-year, $50 million commitment by the Joe and Clara Tsai Foundation.
The Foundation has brought on Gregg Bishop, who formerly led both New York City’s Small Business Services and the Coro New York Leadership Center, to run the Social Justice Fund – and has called the program, which will loan an initial $2.5MM to Brooklyn’s small businesses, EXCELerate.
“We announced the formation of our Social Justice Fund last summer at the height of the pandemic and in the midst of a powerful uprising calling for social justice in Brooklyn and across the country. We know that there is no social justice without economic opportunity, which is why we are so excited to launch the Brooklyn EXCELerate Loan Program aimed at elevating Brooklyn’s BIPOC business owners post- pandemic and doing our small part to overcome barriers this community faces in accessing capital,” said Clara Wu Tsai, Co-Founder of the Joe and Clara Tsai Foundation. “Gregg Bishop’s leadership at the Fund will be instrumental in helping us to execute this vision. He has dedicated his life to the pursuit of economic opportunity for BIPOC communities in NYC and we know that he will work with us to grow the impact of the Social Justice Fund– and the loan program– many times over.”
“As the City comes back from the pandemic, we have an opportunity to do it better than we did before, to address some of the longstanding barriers preventing the accumulation of Black wealth and ensure that everyone can equally benefit from the capital that is coming into our city anew,” said Gregg Bishop, Executive Director of the Social Justice Fund. “Which is to say that if you qualify, we hope you will apply. We hope you will make a special effort to support BIPOC businesses as our city recovers. I am deeply grateful to Clara Wu Tsai and Joe Tsai for their visionary support of Brooklyn entrepreneurs, and look forward to an exciting phase ahead.”
The BIPOC loan products being offered include:
- ‘Rapid Recovery’ loans up to $15,000 will aid those who were able to stay open through the pandemic with expenses like equipment, renovations and rent & lease assistance, all at no interest.
- ‘Restart’ loans will provide Brooklyn businesses with loans from $15,000 to $100,000 at 2% interest. Qualifying businesses have closed temporarily or have significantly reduced operating hours and have significant challenges to reopening or normalizing due to insufficient operating capital.
Loan program officers will assign each business receiving a ‘Restart’ loan with a business counselor to assess the business and produce a technical assistance plan; recipients will also take part in educational programming and other community events with their peers.
Instead of relying on the deeply-complicated and often discriminatory credit score system to determine eligibility, the Social Justice Fund is making all loans ‘character-based’ – meaning that applicants will be reviewed through the lens of references provided by local community members on their behalf. They will also only be available to those with credit scores negatively impacted by the pandemic, and will require neither collateral or guarantor, providing meaningful assistance to those who might otherwise find it difficult or impossible to obtain capital.
The program comes at a crucial time for equitable economic revitalization in the United States. During the pandemic, African American entrepreneurs had to close their doors at more than twice the rate of their White counterparts. Nationwide, Black-owned businesses declined by 41% between February and April 2020, compared with a 17% decline among White-owned businesses.
But inequitable access to capital was a crisis long before the crisis. BIPOC business owners are more likely than their white counterparts to accrue high levels of student loan debt and high-interest credit card debt while bootstrapping their businesses, often with a negative impact on credit history, leading to loan applications being denied. A 2014 study conducted by the Board of Governors of the Federal Reserve System in 2014 found that 59% of black entrepreneurs do not apply for credit for fear of not being approved.
The new loan program seeks to address the obstacles within capital markets that create unfair hurdles for these entrepreneurs.
“Brooklyn is coming back, but there is no recovery without the equitable recovery of the borough’s small BIPOC businesses,” said Randy Peers, President and CEO of the Brooklyn Chamber of Commerce, “We are grateful to the Foundation for its leadership and creative philanthropy with the BIPOC loan program, which does much more than providing needed funding; it helps repair credits and set entrepreneurs on the path to success at this crucial time. As an institution that focuses on providing access to capital for Brooklyn’s BIPOC-owned businesses, we are deeply committed to Gregg’s success, and grateful for this additional resource for Brooklyn’s entrepreneurs.”
“I am delighted to have this opportunity to accentuate the impact of the investment that Joe and Clara Tsai Foundation Social Just Fund is making in the EXCELerate Loan Program. We look forward to working with Gregg and his team to provide the much-needed funding to help get Brooklyn’s BIPOC businesses back on their feet.” said James H. Bason, President and CEO of TruFund Financial Services, Inc. “Our partnership will have a significant positive impact upon our ability to provide loan capital and support to promising small businesses that have been adversely impacted by the pandemic and cannot access adequate levels of affordable capital to re-opn.”
Members of the philanthropic and small business community praised Clara Wu Tsai’s leadership, the work of the Fund and Gregg Bishop’s new role within it:
“Small businesses are the lifeblood of our communities, and it’s been our BIPOC-led businesses, and the neighborhoods that depend on them, who have been hit hardest by the pandemic,“ said Darren Walker, President of the Ford Foundation. “It’s our role as philanthropists to promote fairness and equity in the most trying times, and when good investments help people to overcome challenges and get back on solid ground, that’s philanthropy in its purest form. I applaud my friend Clara Wu Tsai for her vision and leadership, and know that Gregg Bishop’s deep commitment to the people of New York City will be instrumental in providing stability for those who need it most.”
“Over the course of the last year, our nation has been reckoning with not one but three crises: a health crisis, a financial crisis, and an ever enduring racial crisis, and the resultant inequities,” said Jennifer Jones Austin, CEO of the Federation of Protestant Welfare Agencies. “With the BIPOC loan program, and Clara Wu Tsai and Gregg Bishop’s leadership, the Social Justice Fund is modeling what good citizenship looks like by helping support Brooklyn’s resilience and economic return with equity as a critical, core focus.”
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About The Joe & Clara Tsai Foundation Social Justice Fund:
The Social Justice Fund (SJF), an initiative funded by Joe and Clara Tsai Foundation, centers its work around Economic Mobility and Racial Justice for BIPOC populations in Brooklyn. As part of this commitment, the SJF is partnering with the Brooklyn Alliance Capital, the Brooklyn Chamber of Commerce’s Community Development Financial Institution (CDFI), and TruFund Financial To assist BIPOC-owned businesses who have been impacted by COVID and the economic shutdown, in restarting and recovery. The SJF will provide a $2.5 million investment to be managed by the BAC and TruFund, to be deployed through unique and flexible loan products structured to assist BIPOC businesses who cannot obtain restart capital through other resources.
About TruFund Financial Services, Inc.
TruFund Financial Services, Inc. is a wholly independent national nonprofit Community Development Financial Institution (CDFI). TruFund seeks to stimulate economic development in communities that are underserved by traditional banking institutions by providing fair and accessible capital, hands-on technical assistance, and innovative solutions to small businesses and nonprofit organization.
Follow TruFund on Facebook, LinkedIn, and Twitter to find out more about the company’s programs and initiatives or visit www.trufund.org.
