Greater Philadelphia Financial Services Leadership Coalition Launches Fund to Increase Support of Black and Brown Businesses

Greater Philadelphia, January 11, 2022 – The Greater Philadelphia Financial Services Leadership Coalition (GPFSLC), comprised of public sector and community partners committed to solving the region’s most pressing issues related to supporting Black and Brown businesses, has launched The Philadelphia Growth, Resiliency, Independence, Tenacity Fund (PHL GRIT Fund). This fund will increase overall support for Black and Brown businesses through the region’s network of Community Development Financial Institutions.

For decades banks have been working with Community Development Financial Institutions (CDFIs) to provide loans and business counseling to small businesses and all banks involved knew they did not want this to be a one-time infusion of funding, but rather a long term, sustainable effort to provide more investment to deploy more loans to underserved businesses. In the beginning of 2021, approximately 30 financial institutions, Federal Reserve Bank of Philadelphia, Pennsylvania CDFI Network and Urban Affairs Coalition came together through the Chamber of Commerce of Greater Philadelphia’s Recharge and Recovery initiative to discuss what additional work could be done to ease the impact of the pandemic on small businesses. This group became the Greater Philadelphia Financial Services Leadership Coalition and launched a four-year campaign to support Black and Brown businesses.

“Despite the efforts made in the past year, the help provided to small businesses have not met their needs, especially for minority businesses,” said Dan Betancourt, Chair of the Pennsylvania CDFI Network and CEO to Community First Fund. “The GPFSLC effort is unique – we are not aware of financial institution leaders coming together at this scale to address such pressing issues.”

Through this initiative all 11 Philadelphia CDFIs will receive grants to help strengthen their operations and better serve small businesses, or investments commensurate with their current balance sheet capacity. The goal is to help the CDFI ecosystem in the region grow sustainably over time. In doing this, area CDFIs will build the capacity required to help small business growth, while addressing historical barriers faced by Black and Brown businesses when accessing capital. These investments will enable the CDFIs to provide loans for 1,000 Black and Brown businesses in Greater Philadelphia.

During the first phase of the multi-year initiative, GPFSLC members have committed to invest $10 million in new capital to emerging CDFIs in order to bolster the region’s CDFI network. The CDFIs that will receive additional direct investment in the first phase are Beech Capital, Entrepreneur Works, Enterprise Capital, WORC, Impact Loan Fund, Neighborhood Progress Fund and VestedIn.

Banks have worked together creatively to contribute to GPFSLC’s GRIT Fund’s capital component. Fulton Bank has created a loan participation arrangement to allow local, minority and regional banks to contribute and maximize investments.

“The commitment of regional financial institutions to help bolster the emerging CDFIs signifies how serious we are about helping our neighborhood businesses,” said Sue Lonergan, Director of Middle Market and Specialized Commercial Lending for Fulton Bank and GPFSLC Co-Chair. “Coming together in this way to support CDFIs is a new model for us and one we hope to expand over time.” So far, the effort has attracted other regional banks, such as Customers Bank, Univest and WSFS, and minority depository institutions, Asian Bank and United Bank of Philadelphia.

Larger institutions, such as Bank of America, Citizens Bank and PNC Bank, have made incremental capital commitments directly to CDFIs and we anticipate more direct commitments in 2022. Members of the GPFSLC remain committed to their existing CDFI relationships and will continue to look for ways to grow current investments over time.

The GPFSLC has set a goal to raise an additional $10 million in pooled philanthropy to build the capacity of these CDFIs which will be managed by the Pennsylvania CDFI Network (Network). The Network will provide support for the seven emerging CDFIs to enhance loan loss reserves and operations, including hiring and training new staff and upgrading technology to enhance services provided to businesses.

Bank of America has committed an initial leadership gift to seed the philanthropic fund with Customers Bank, Fulton Bank, JP Morgan Chase, M & T Bank, PNC Bank, Univest, Wells Fargo, and WSFS also contributing in the initial phase. Additionally, The Philadelphia Foundation’s Frances P. Kellogg Fund committed to support GPFLSC’s work.

CDFIs identified business counseling and professional advisory services as a critical need by minority business owners. The GPFSLC added a volunteer program component to the PHL GRIT Fund. Giving their direct access to thousands of professionals, the professional advisory volunteer services will be directed by the Chamber of Commerce for Greater Philadelphia. Using the Philadelphia Foundation’s Key Skills Hub, the Chamber PHL will leverage their membership to volunteer their expertise to support Black and Brown businesses in the fields of accounting, marketing, strategy and legal to counsel businesses served by the CDFIs.

The Greater Philadelphia Financial Services Leadership Coalition anticipates more financial institutions will be joining or increasing their funding in the next four years, in addition to the existing support some banking institutions already provide to Black and Brown businesses and CDFIs. The goal in future phases of the Philadelphia GRIT Fund effort will be to provide support to larger CDFIs, including Community First Fund, PIDC Capital and The Reinvestment Fund, to deploy additional capital for more loans to support the effort.

“Supporting our region’s Black and Brown businesses during these unprecedented times is a priority for GPFSLC member financial institutions and working closely with our regional CDFI leaders on a sustainable model was important,” said Jim Dever, President, Bank of America Greater Philadelphia and GPFSLC Co-Chair. “We look forward to successfully deliver more support for Philadelphia businesses owners by expanding financial resources and building capacity along with our critical CDFI partners.”

About Greater Philadelphia Financial Services Leadership Coalition (GPFSLC)
The GPFSLC is a coalition of financial services leaders, active in the business community, who are concerned about the growth and sustainability of small business, specifically minority businesses. Its purpose is to work collectively, alongside the public sector and community partners, to solve the region’s most pressing issues related to, and in support of, Black and Brown businesses. GPFSLC members work to leverage, support, and scale existing successful efforts, help seed new initiatives and opportunities to solve pressing issues.

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Reporters may contact:
Varsovia Fernandez, Executive Director
Pennsylvania CDFI Network
Email: vfernandez@pacdfinetwork.org
Phone: (717)725-6356

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