Justine Petersen, a leading microlender in the region, hopes a $200,000 investment from JPMorgan Chase will help minority-owned small businesses north of Delmar.
The investment will continue to assist the local nonprofit in its efforts to help those small business owners with credit-building resources, as well as provide access to safe and affordable loans.
Galen Gondolfi, the chief communications officer with Justine Petersen, said that is one of several obstacles minority business owners face.
“Many businesses are falling prey to predatory rates and high interest rates [for] small business loans, which are very much prevalent on the internet, as well as in brick-and-mortar operations throughout the St. Louis region,”Gondolfi said.
A lack of access to entrepreneurial mentorship and marketplace opportunities also create barriers for entrepreneurs of color. But the nonprofit has been working to create a pathway to change with its initiative.
Gondolfi said that starts with access to capital.
Justine Petersen’s process is similar to that of banks and credit unions. Business owners can apply for a loan at the nonprofit’s office, as long as they have a business plan and financial documents like tax returns and bank statements. An underwriting committee then vets the loan, and if approved, lends the money.
“Every lending activity at Justine Petersen, every loan is also an opportunity to build credit,” Gondolfi said. “Both personal credit for that small business owner as well as business credit. We look at it from an asset-building lens, and that is we're not merely deploying capital.”
According to a 2017 Federal Reserve Bank report, more than 50% of black business owners were denied bank loans. That’s in comparison to nearly 25% of white business owners.
Erika Wright, vice president of global philanthropy at JPMorgan Chase, said those kinds of disparities only further the racial wealth divide. A key way to address the racial wealth gap is to support minority-owned small businesses, she said.
“We're thinking about how those communities ultimately end up benefiting from that boom in economy,” Wright said. “And we want small businesses not only to be able to open, but we want you to be able to grow and thrive.”
In a statement, Pamela Blair, co-owner of EyeSeeMe African American Children’s Bookstore, said investments like this are crucial.
“These types of services for small businesses are in dire need, especially for those businesses operating in neighborhoods that are economically challenged,” Blair said.
Prior to the partnership with JPMorgan Chase, Justine Petersen had deployed nearly $35 million to 3,000 different businesses north of Delmar over the past 10 years, Gondolfi said.
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