The City of Philadelphia and PIDC, Philadelphia’s public-private economic development corporation, today announced a $5 million investment to fund a significant expansion of resources to support entrepreneurship and business growth by people of color, women, and immigrants. The new initiative—listed as a priority in the City’s recently released Vision for Inclusive Growth—will build on existing investments by the City and PIDC in communities that have historically been disconnected from traditional capital sources, business supports, and networks.
The three components of this initiative are: (1) new loan capital for United Bank of Philadelphia, the city’s only African American-owned bank, to support minority- immigrant-, and woman-owned businesses; (2) a fund to support investments in existing businesses owned by people of color, women, and immigrants; and (3) expanded services to support the growth of these businesses including workshops, peer mentoring, and one-on-one support.
“Earlier this month, we unveiled our administration’s vision for driving inclusive growth in Philadelphia, and this new investment by the City and PIDC marks a substantive step towards our goal of growing the economy to create family-sustaining jobs for all Philadelphians,” said Mayor Jim Kenney. “By expanding capital and entrepreneurial supports for people of color, women, and immigrants we will be able to build up our small business community and extend opportunities to those who have been locked out for too long. While both the City and PIDC have funded business lending and technical assistance for some time, our new initiative will be more intentional about directing those resources to the individuals and communities that need them most. This is the first of many actions we intend to take to achieve the goals set forth in our vision for inclusive strategy.”
The three-part initiative will address current gaps that have been found to impede the growth of minority-, woman-, and immigrant-owned businesses. National statistics, as well as a recent local business survey conducted by PIDC, show that small businesses in Philadelphia—particularly minority-, woman-, and immigrant-owned businesses—face significant challenges in accessing affordable, flexible capital. By assisting these businesses and entrepreneurs, the new initiative will help businesses grow in Philadelphia.
“From our experience in the community, as well as our own and national research, PIDC is very familiar with the particular challenges faced by people of color, women, and immigrants trying to grow their businesses in Philadelphia,” said John Grady, President of PIDC. “We have developed this initiative with the City of Philadelphia to directly address the needs we hear about most from these business owners. This joint initiative builds on our previous work and will increase opportunities for these entrepreneurs.”
The first component provides a $2.5 million grant to United Bank of Philadelphia to expand their lending platform and strengthen the financial position of the bank. United Bank is Philadelphia’s only African American commercial bank and was chartered in 1992 as Philadelphia’s “hometown” bank to provide comprehensive banking services to businesses in Philadelphia, with a focus on African American, Hispanic, Asian, and women entrepreneurs. United Bank and PIDC will expand their long-standing partnership to finance established businesses.
“United Bank of Philadelphia is pleased to have this opportunity to work more collaboratively with PIDC as we have similar missions and goals. Together, we can make an even greater impact on the region by supporting small businesses with a specific emphasis on women- and minority-owned businesses throughout Philadelphia,” said Evelyn Smalls, President and CEO United Bank of Philadelphia. “We are excited about this collaboration which will allow us to use our talents and expertise to learn from each other and make systemic changes so that all persons, regardless of their differences, can make sustainable contributions to the region.”
Recognizing that different types of capital, as well as diverse lenders and investors, are needed to support business growth, the second component of the initiative will be an investment fund that provides flexible investments to support growth in minority-, immigrant-, and woman-owned businesses. PIDC will create a $2 million fund, comprised of a $1 million grant from the City of Philadelphia and $1 million of PIDC’s capital, to make investments in Philadelphia businesses run by entrepreneurs of color, women, and immigrants. To manage and deploy this funding, as well as to leverage it with additional private investment capital, PIDC will partner with one or more investment managers. This fall, PIDC will issue a public solicitation seeking proposals from diverse fund managers with a demonstrated track record of supporting underrepresented communities.
“This initiative is a major step forward in connecting people of color, women, and immigrants with the capital needed to open and grow their businesses,” said Harold T. Epps, Commerce Director for the City of Philadelphia. “Philadelphia is a majority-minority city, but we trail our peers in minority business creation and growth. Through these investments, Philadelphia is breaking down barriers for our entrepreneurs who have traditionally lacked access to capital and support to help their businesses grow.”
Complementing the increased availability of capital, the third component of the joint initiative will focus on business support services to catalyze growth. PIDC’s recent surveys have found that the top challenges faced by small businesses in Philadelphia are managing cash flow, hiring and retaining quality staff, and increasing revenue. Half of survey respondents experienced at least one financing challenge. Over the next three years, PIDC will expand its business support for entrepreneurs that have historically lacked access to formal and informal networks of professional support required to scale their businesses. PIDC will aid clients with marketing, financial, operational, and business planning programs through a platform combining workshops, peer mentoring, and one-on-one support.
PIDC has a longstanding track record of providing access to capital and business support services to minority- and women-owned enterprises, investing nearly $40 million through 192 loans over the last five years, and piloting new programs to support entrepreneurs through in-depth business education, networking, and credit repair. This initiative is designed to build on these investments, fill existing gaps in services, and bring new resources to accelerate the growth of businesses owned by entrepreneurs of color, women, and immigrants.
About the Philadelphia Department of Commerce
The mission of the Department of Commerce is to ensure that Philadelphia is a globally competitive city to which employers flock, entrepreneurs thrive and innovation abounds; to recruit and retain a diverse set of businesses; to foster economic opportunities for all Philadelphians in all neighborhoods; and to partner with workforce development programs and local businesses on talent development ensuring that all Philadelphians can find and retain living-wage jobs.
For more information about the Department of Commerce, visit phila.gov/commerce.
PIDC is Philadelphia’s public-private economic development corporation. A non-profit founded in 1958 by the City of Philadelphia and the Greater Philadelphia Chamber of Commerce, PIDC’s mission is to spur investment, support business growth, and foster developments that create jobs, revitalize neighborhoods, and drive growth to every corner of Philadelphia. PIDC has invested more than $16.6 billion of financing and more than 3,200 acres of land sales—which has leveraged over $29 billion in total investment and assisted in retaining and creating hundreds of thousands of jobs in Philadelphia. In the last five years, PIDC has borrowed more than $60 million of capital from private investors and raised more than $10 million in new equity investments that have helped fund more than $142 million in 480 business loans to growing companies located in 96% of the city’s zip codes and more than half of PIDC clients are minority- or woman-owned businesses.
For more information about PIDC, visit www.PIDCphila.com and follow us @PIDCphila on Twitter.