JPMorgan Chase has been dedicated to combat systemic racism in borrowing and intends on furthering its efforts with a new multi-million-dollar investment to assist underrepresented businesses. The nation’s largest bank is hoping to level the playing field so underrepresented businesses can leverage the financial support needed to bid for new corporate business.
Decades of systemic exclusion have kept Black, Hispanic and Latino businesses disproportionately affected and marginalized. Launching the Diverse Supplier Grant, JPMorgan Chase, in partnership with Local Initiative Support Corporation, a community development financial institution and certified 501(c)(3), will work together to combat issues in access for these business owners.
“This initiative helps to remove a common financial barrier often faced by ethnic minority-owned firms when they are seeking business opportunities with corporations. Large firms operating in today’s business environment ask their suppliers to meet complex, minimum requirements in order to do business. While these requirements protect corporations from a variety of risks, meeting them can often be cost-prohibitive for prospective suppliers,” said Ted Archer, head of Business Partner Diversity, JPMorgan Chase. “The Diverse Supplier Grant Initiative addresses this issue by helping to overcome the barriers that can prevent valuable business partnerships from developing. The added financial assistance enables Black-, Hispanic- and Latino-owned companies to access corporate contracts — not only with JPMorgan Chase, but with companies across multiple industries.”
Black-, Latino- and Hispanic-owned businesses remain the hardest hit since the onset of the pandemic. Helping to expose major issues in access for underrepresented businesses, the pandemic created opportunity for large corporations to step in to help fill the gap. While many have had to close their doors, other minority business owners can start to see a silver lining.
“Small business owners everywhere face similar challenges brought on by the pandemic. However, Black-, Hispanic- and Latino-owned businesses often face greater challenges related to accessing capital, market opportunities and other resources needed to navigate than other businesses. According to JPMorgan Chase Institute research, these companies are underrepresented among firms with substantial external financing. This lack of access to capital rooted in the overall wealth disparity, limits opportunities for businesses to scale and capture more lucrative contracts,” said Archer.
Small businesses do more than supply goods and services. Creating revenue for local neighborhoods, small businesses are seen as the cornerstone for many local areas. By adding supplier diversity, true racial equity can begin to form and provide a lasting solution for an age-old issue.
“Supplier Diversity is one of the most effective ways to impact diverse communities and address racial inequity and at the same time strengthen our supply chain and overall ability to serve customers globally. Diverse businesses tend to hire and do businesses within their local communities,” said Archer. “When we spend a dollar with a diverse-owned business, we not only contribute to their revenue growth, but also to job creation and increased wealth in the local communities in which they operate. That is why it is so important that JPMorgan Chase is applying all of its business resources and forging partnerships with LISC and others to help advance racial equity and build a more inclusive economy.”
The Diverse Supplier Grant has a unique feature which will allow the lending to continue to help underrepresented business owners meet requirements for bidding. The ‘pay-it-forward’ component creates a cyclical process for businesses who have received funds and secured new corporate business contracts. Required to repay the funds received into the original pool, these businesses will help the next class of business owners to take part in the initiative. The initiative is also wired to receive corporate donations with JPMorgan Chase matching it dollar-for-dollar.
“JPMorgan Chase has partnered with the Local Initiatives Support Corporation to manage the program. LISC will administer the initiative end-to-end and report on the impact of this capital assistance on participating businesses,” said Archer. “Interested businesses would visit the LISC program webpage to take an eligibility assessment. If they meet the criteria, LISC will work with them directly to help meet their financing needs and disperse the funds.”
Grants available range from $25,000 to $200,000 and can be used towards operational calls, operational control enhancements and insurance and bonding.
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