Bloomberg Línea — The inequalities faced by immigrants or descendants of Latinos and African Americans in the United States, which can be observed in various social spheres, are also present when it comes to starting a business, and which impacts the wealth creation of such a venture, according to a study by JPMorgan Chase (JPM).
The study points out that African-American and Hispanic small business owners have a lower level of initial wealth, which not only influences their ability to invest in their businesses, but also to generate significant wealth.
In 2021, according to Statista, the rate of new entrepreneurs among native-born US residents was 0.32% per month, well below the rate of 0.58% among immigrants, and which is why it’s important to foster entrepreneurship among those communities.
Statista says that of 100,000 new entrepreneurs per month, 280, or 0.28%, are of African-American descent.
In a bid to support entrepreneurship in this community, JPMorgan Chase has launched its Special Purpose Credit Program (SPCP) which aims to increase access to credit for entrepreneurs in historically underserved areas throughout the United States.
JPMorgan says the program is based on geography, allowing the bank to direct capital to areas that need it most, which would otherwise not be approved, or which would offer less favorable terms. “Customers don’t need to do anything special to qualify. If the business is located in an eligible area, then the application will be evaluated under the program,” the investment bank said.
In Dallas, Detroit, Houston and Miami, the first accreditations have been granted, to mostly African-American and Hispanic neighborhoods, and which is part of the firm’s $30 billion commitment to support minorities.
“Minority entrepreneurs are fast becoming the customer of the future,” said Mikal Quarles, head of Chase Business Banking Racial Equity Strategies.
“We want to help more minority-owned small businesses create and sustain long-term wealth. We are accomplishing this by building infrastructure, strengthening relationships and integrating owners into the mainstream financial system. Growing and thriving small business clients are key to our long-term business goals,” he added.
