Today, Starbucks announced its plans to invest $10 million in four community lenders to drive economic opportunity in Chicago.
This news comes weeks ahead of the opening the Starbucks Reserve Roastery on Chicago’s Magnificent Mile.
The investment is expected to help finance more than 500 loans to foster growth in small business, support community development projects and create more jobs in Chicago’s underserved communities.
According to a press release from the company, the $10m is planned to be dispersed among Accion Chicago, Chicago Community Loan Fund (CCLF), Local Initiatives Support Corporation (LISC) and IFF — four established Community Development Financial Institutions (CDFI) that drive economic opportunity in the city’s neighborhoods, especially within those with little access to the flexible, affordable capital that entrepreneurs need.
In addition to lending, the organizations will provide borrowers with mentoring and technical assistance to ensure the success of their projects.
“We believe the pursuit of profit is not in conflict with the pursuit of doing good,” said Starbucks ceo Kevin Johnson. “We know that our business performs at its best when the communities we serve are thriving. This sustained investment will provide borrowers who often face barriers with access to capital and mentorship to grow their business and create more jobs in Chicago.”
>Mayor Lori E. Lightfoot had this reaction, “I applaud Starbucks for their commitment of corporate citizenship and efforts to strengthen the communities in which they serve.”
She added, “Chicago’s own relationship with Starbucks stretches over three decades, and we are incredibly excited to continue that partnership well into the future, through the 200 new jobs created in the beautiful new Reserve Roastery, as well as across our neighborhoods that aligns to our new INVEST South/West initiative, as we work together to drive investment and access to opportunity for every one of our city’s residents and families.”
Meghan Harte, executive director of LISC Chicago, was also please to hear this as her organization has invested more than $970M in grants, loans and equity throughout Chicago.
“Our communities are filled with talent and entrepreneurial spirit. What they often lack is access to the right kind of capital so that entrepreneurs can launch, build and grow. With this investment, Starbucks is supporting a broadly shared prosperity that will deliver clear benefits to residents, while making our neighborhoods safer and stronger.”
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With more than 150+ combined years of experience providing capital and financial guidance, these CDFIs have the financial expertise and local knowledge of Chicago to support meaningful, sustainable impact. Areas of focus for loan disbursement will include small businesses, nonprofit organizations and commercial real estate ventures.
“OFN commends Starbucks for this investment in small business and job creation for the Chicago communities that need it most,” said Amir Kirkwood, chief lending and investment officer for Opportunity Finance Network® (OFN). “This welcome investment will be managed by four CDFIs who are OFN members, all expert in providing much-needed fair and responsible lending to small businesses to create economic opportunity where it really counts.”
“The Chicago Community Loan Fund has been working strategically to create more commercial retail in low-income neighborhoods for a number of years,” stated Bob Tucker, Chief Operating Officer of CCLF. “With this influx of capital from Starbucks, CCLF will leverage additional funding to help address Chicago’s loss of population in these communities and create not only access to quality goods and services, but needed jobs for local residents.”
This investment follows Starbucks Create Jobs for USA initiative in partnership with the OFN in 2011. The program was dedicated to creating and sustaining jobs in underserved communities throughout the U.S. bolstered by a $5 million philanthropic contribution from the Starbucks Foundation. In three years, it raised more than $15 million in donations, which participating CDFIs turned into $105 million in financing for businesses to create or retain more than 5,000 jobs.
“Accion provides the capital, coaching and connections that neighborhood entrepreneurs need to create jobs and wealth in underserved communities. In Chicago, entrepreneurs of color and women entrepreneurs need services that traditional financial institutions often can’t provide,” said Brad McConnell, CEO of Accion Chicago. “That’s what we do, and that’s why partnerships with thoughtful organizations like Starbucks are so crucial.”
“IFF is thrilled that a partner like Starbucks is seeing the communities of Chicago as wellsprings of opportunity,” said Matthew Roth, President Core Business Solutions at IFF. “By making an investment — one that expects to be repaid — Starbucks is betting that our communities can transform their dreams and aspirations into financial and social return.”
Bank of America will assist Starbucks in deploying the investment to each of the four lenders. The CDFIs are expected to start making loans to small business owners and community organizations by early next year, although borrowers can apply for a loan now. Chicagoland residents can learn more and apply for loans by visiting the respective CDFI websites.
Reel 360 and Reel Chicago applaud this action from Starbucks and will be having many Pumpkin spiced lattes to celebrate.