American Express Provides $40 Million To Accion Opportunity Fund, An Effort To Aid Underfunded Black Businesses
Aiming to help support underfunded Black businesses, credit card giant American Express is providing the Accion Opportunity Fund (AOF) with a $40 million investment.
Calling it the largest single investment the nonprofit lender has ever received, AOF reports the funding will be used for a new program to offer loans and other resources to small business owners in America that have faced insufficient capital issues historically.
With nearly 90% of its clients being people of color, immigrants, and women, AOF offers affordable capital and coaching. A Community Development Financial Institution (CDFI), AOF says the investment will allow it to offer more underserved small businesses access to loans. With some 25 years of service, AOF, according to its website, has issued $516 million in capital to business owners.
Over five years, AOF estimates the $40 million will yield more than $125 million in loans for small businesses as the loans are paid back and further lent out in the community. The funding also is projected to create and retain over 10,000 jobs and drive small business growth.
The partnership between American Express and AOF is anticipated to give small businesses the momentum they need in a post-COVID-19 pandemic economy. The fresh funding is essential as lack of capital remains an ongoing problem for Black entrepreneurs. The loans will range from $5,000 to $100,000, carry interest rates as low as 5.99%, and feature no prepayment penalties.
“Investing responsibly in the nation’s small businesses is essential to building a more equitable society. This
program combines access to capital and expert advising to support small businesses that are in a strong position to rebuild and grow in 2021 and beyond. We’re looking to lift up those who have been overlooked and underfunded for far too long,” Luz Urrutia, CEO, Accion Opportunity Fund, said in a statement. “Together with American Express, we’re working to accelerate progress towards an inclusive financial system.
The new investment by American Express is tied to a $1 billion action plan the company announced last fall to enhance diverse representation and promote equal opportunities for colleagues, customers, and communities.
“Our partnership with Accion Opportunity Fund expands on our progress toward providing financial support and education to at least 250,000 Black-owned small and mid-sized businesses by the end of 2024,” said Jessica Ling, vice president, Global B2B Marketing Strategy, Engagement, Enablement at American Express. “We are excited to partner with Accion Opportunity Fund to advance our shared, longstanding commitment to support underfunded communities, enhance financial inclusion and reach as many small businesses as possible that need access to capital.”
Ron Busby Sr., president and CEO of the U.S. Black Chambers Inc., a leading advocacy group for Black-owned businesses, praised the initiative in a statement.
“This new program between Accion Opportunity Fund and American Express is valuable and vitally important for Black-owned small businesses as they look to the future,” he said. “Equitable, adequate and intentional investing in Black entrepreneurs will help our nation recover faster, become stronger and grow individual businesses to ultimately close generational wealth gaps.”
Small business owners can gain more details and apply for loans here.
