TD Bank is rolling out a new initiative to further support Black and brown business owners in America.
Today, the national bank announced the establishment of its new $100 million equity fund to provide financial resources to small minority-owned businesses. This comes as part of its continued commitment to address racial inequities and support underserved communities of color.
TD Bank’s equity fund allows Specialized Small Business Investment Companies (SSBICs) — which provide financial assistance to disadvantaged or minority-owned businesses — and Community Development Financial Institutions (CDFIs) — known for helping Black and Latinx-owned businesses secure financing — to offer up small business loans and technical assistance to ensure that these businesses have the tools they need to scale effectively.
“We hope that our investment in these SSBICs and CDFIs serves as a means of making access to capital more equitable for minority small business owners. But our support doesn’t end there,” Michael Innis-Thompson, Head of Community Lending and Development at TD Bank, shared in a statement. “TD has always helped sustain small business owners. At the end of the day, we want these vital businesses to succeed – it’s what differentiates us as a purpose-driven bank.”
As a result of the pandemic, many of these businesses have suffered from loss of customers and forced shutdowns that have affected their ability to carry on business as usual. TD Bank’s new fund wants to help rectify those situations to keep Black and brown entrepreneurs’ ventures open for business.
“The pandemic has highlighted the depth of disparities that exist in communities of color, especially as it relates to small businesses, which serve as the backbone of our economy,” Greg Braca, President and CEO, TD Bank and AMCB, said in a press statement. “The equity fund will ultimately infuse capital and help stabilize these small businesses. But it’s also about contributing to job creation, stimulating economic development, revitalizing these vibrant communities, and just as important, breaking the cycle of disinvestment which systemically prevents communities of color from thriving. Small businesses are the heart of our communities – especially communities of color – and it’s up to us to help them succeed.”
The new fund will reportedly allocate $75 million of its capital to an upcoming SSBIC initiative — set to launch later this year — and the remaining $25 million towards small Black and Latinx-owned businesses, funded through CDFIs.
According to Innis-Thompson, he told American Banker that TD Bank is also striving to become “the bank of choice for Black and Latin borrowers,” adding that “we are being very purposeful in designing outreach efforts, programs and products to make sure that happens.”
In addition to the new fund, TB Bank is also focusing its efforts on catering to markets such as Philadelphia, Washington, and Miami, known for being areas with large Black and Hispanic communities.