Newark Entrepreneurs of Color Fund launches with $1.7M

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Amid the pandemic, which has disproportionately affected communities of color, a survey by the City of Newark found that small business owners lost $60 million to $100 million in consumer spending since the onset of COVID-19. A new organization in the state’s largest city can serve as a resource to connect sources of capital and assistance with Black and Hispanic and Latino business owners so that they can start or grow their enterprises.

The Entrepreneurs of Color Fund (EOCF) launches in Newark on Feb. 22, with nearly $1.7 million from Prudential Financial, which calls the city home; JPMorgan Chase and the Rockefeller Foundation.

EOCF in Newark will work together with Greater Newark Enterprises Corp. and LISC Greater Newark. The program will use the funding to generate loans for 50 small businesses, along with 500 hours of technical assistance.

“Entrepreneurs of color in our headquarters city have told us they need quality loans and a network of support to grow, offer quality employment, and generate financial security for their employees and their communities,” Prudential Vice President of Inclusive Solutions Sarah Keh said in a statement. “The EOCF Newark answers that call at a critical time.”

A Feb. 17 announcement about the EOCF’s expansion to the Brick City said that 71% of small businesses there are owned by entrepreneurs of color. However, according to a Federal Reserve System report from last year, Black-owned businesses receive financing at about half the rate (24%), compared with White-owned businesses (48%).

Newark is the seventh city to take part in the program, which has so far provided more than 1,200 loans – and more than $43 million in capital – to underserved entrepreneurs nationwide since its founding in 2015.

According to a statement from LISC Greater Newark Executive Director Jorge Cruz, “[t]he EOCF approach helps strengthen our local infrastructure of small businesses, expand employment, grow local incomes and build intergenerational wealth.

“It breaks down racial barriers to opportunity in ways that make our city and our economy work better for everyone,” he said.

Local Initiatives Support Corp. manages the national EOCF program, which began in Detroit in 2015. So far, the organization says it has helped business owners in Detroit, the Bay Area, New York City, Chicago, Los Angeles and Washington, D.C. through a network of Community Development Financial Institutions (CDFI) and funders to provide support.

“The Entrepreneurs of Color Fund has unlocked capital and created hundreds of jobs around the country, and we’re excited that Newark small businesses will have the same chance to succeed,” said John Bonhomme, managing director and regional director for JPMorgan Chase’s Consumer Bank in New Jersey.