Starbucks investing $10 million to boost small business in Chicago
Starbucks Coffee Company is hoping to spur economic development and entrepreneurship in Chicago’s underserved neighborhoods.
Weeks before the opening of its Reserve Roastery on Chicago’s Magnificent Mile, Starbucks said it plans to invest $10 million in four community lenders to drive economic opportunity in Chicago. 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.
“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.”
The $10 million investment from Starbucks will be dispersed among four established community lenders: Accion Chicago, Chicago Community Loan Fund (CCLF), Local Initiatives Support Corporation (LISC) and IFF. The groups are community development financial institutions that drive economic opportunity in the city’s neighborhoods, especially within those with little access to the flexible, affordable capital that entrepreneurs need. Areas of focus for loan disbursement will include small businesses, nonprofit organizations and commercial real estate ventures.
In addition to lending, the organizations will provide borrowers with mentoring and technical assistance to ensure the success of their projects.
This investment follows Starbucks' Create Jobs for USA initiative in partnership with the the Opportunity Finance Network 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.
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.