Bank of America’s $12.5M investment marks the launch of a new national loan fund, critical to building wealth and racial equity in Black communities
[September 27, 2022] – Orlando, FL. – Today the Alliance announced the launch of its Black Renaissance Fund, a $125 million fund providing patient capital to Black-led Community Development Financial Institutions (CDFIs) and helping stabilize the operating support needs of the Alliance. An early $12.5M investment from Bank of America marks the launch of the Fund that will support racial equality and economic opportunity by investing in Black communities.
CDFIs empower populations underserved by traditional lenders by providing more flexible lending solutions and allocating time to provide technical assistance to borrowers. Despite their critical services, Black-led CDFIs experience inequitable access to capital, capacity-building resources and technical assistance. For example, one study showed that from 2014 to 2017, the assets of White-led CDFIs grew by $21.8 billion, while the assets of minority-led CDFIs grew by just $682.5 million.
The Black Renaissance Fund will create a pathway for Black communities to equally benefit from the CDFI industry’s expansion by providing below market interest rate loans to the Alliance’s CDFI members. The capital will allow CDFI members to strengthen their balance sheets, build loan capacity and generate more revenue through interest income. In turn, the CDFI members can provide more affordable capital to the Black communities they serve, and ultimately lead to an increase in businesses served and funded, affordable housing units made available, community facilities developed and high-quality jobs created.
“We strive to empower Black-led CDFIs within our membership to build the capacity of their organizations and increase wealth within their communities. By growing the balance sheets of Black-led CDFIs with this fund, we’re not only strengthening their balance sheet but also creating an ecosystem for greater investment in projects that provide affordable housing, create jobs and strengthen small businesses in marginalized communities,” said Lenwood V. Long, Sr., President & CEO of the Alliance.
“Our support of The Alliance’s Black Renaissance Fund is part of our longstanding effort to address important economic and social issues,” said Dan Letendre, CDFI Executive at Bank of America. “CDFIs are critical to community economic growth and stability, as they provide much-needed financial investment in disadvantaged and distressed communities.”
The Alliance has partnered with renowned organizations and individuals to take part in this historical and innovative Fund. Lendistry, an Alliance member and CDFI fin-tech lender, will be the fund management partner overseeing the Fund’s daily operations such as managing applications and performing underwriting services. The Alliance is also bringing on Melissa Bradley, founder and managing partner of 1863 Ventures, who will serve as key advisor of the
Fund employing her expertise in bridging entrepreneurship, impact investing, and racial equity.
“The growing influence of Black-owned businesses on our economy and their local communities is undeniable, and Black-led deployers of capital need to grow alongside them if those businesses are going to thrive,” says Everett K. Sands, CEO of Lendistry. “Lendistry has wellhoned expertise in delivering capital quickly and responsibly to underbanked communities. We’re proud to lend our innovations to optimize the Black Renaissance Fund’s Impact.”
“The Black Renaissance Fund will empower the fastest-growing segment of entrepreneurs and generate wealth for the Black community. The Census Bureau says America is trending less White, and in 2021, 11 percent of new business owners were Black, and 49 percent were women. The economic future of the United States lies in the hands of entrepreneurs who come from historically marginalized communities–what we call the New Majority. The time is now to fund Black-owned and women-owned businesses,” said Melissa Bradley, 1863 Ventures.
The $12.5 million investment by Bank of America is the first in a series of investments that will provide $125 million to support Black-led CDFIs. The Black Renaissance Fund is currently open to additional investments from other funders.
For more information on how to invest in the Fund, please contact Amber Bond at abo[email protected] or visit www.aaacdfi.org.
# # #
About The African American Alliance of CDFI CEOs
The African American Alliance of CDFI CEOs (The Alliance) is a coalition of more than 65 CEOs of Black-led Community Development Financial Institutions (CDFIs), comprising loan funds, credit unions, venture capital firms, and non-profit developers. Since 2018, The Alliance has represented all 50 states and the District of Columbia. As a result, members are uniquely positioned to address issues related to housing and access to capital for African American populations and communities. Learn more about the Alliance and its programs at http://www.aaacdfi.org.
About Bank of America Environmental, Social and Governance
At Bank of America (NYSE: BAC), we’re guided by a common purpose to help make financial lives better, through the power of every connection. We’re delivering on this through responsible growth with a focus on our environmental, social and governance (ESG) leadership. ESG is embedded across our eight lines of business and reflects how we help fuel the global economy, build trust and credibility, and represent a company that people want to work for, invest in and do business with. It’s demonstrated in the inclusive and supportive workplace we create for our employees, the responsible products and services we offer our clients, and the impact we make around the world in helping local economies thrive. An important part of this work is forming strong partnerships with nonprofits and advocacy groups, such as community, consumer and environmental organizations, to bring together our collective networks and expertise to achieve greater impact. Connect with us on Twitter @BofA_News
B.S.D. Capital, Inc. dba Lendistry (lendistry.com) is a minority-led and technology-enabled small business and commercial real estate lender with Community Development Financial Institution (CDFI) and Community Development Entity (CDE) certification. Lendistry is a member of the
Federal Home Loan Bank of San Francisco, headquartered in a Los Angeles Opportunity Zone. During the COVID-19 pandemic, Lendistry provided Paycheck Protection Program (PPP) loans to small businesses in all 50 states, becoming the #8 PPP lender in the country in 2021. Lendistry was selected by the states of California, Pennsylvania, and New York to administer their small business relief programs, which distributed grants to businesses that lost significant revenues during the pandemic. As a previous SBA Community Advantage lender in California, Lendistry was historically one of the top-ranked lenders in that program in the nation, providing responsible financing to small business owners who needed responsible capital to grow. Lendistry and its nonprofit partner organization, The Center by Lendistry, are dedicated to providing economic opportunities and progressive growth for underserved urban and rural small business borrowers and their communities. In 2022, Lendistry SBLC, LLC, a subsidiary of B.S.D. Capital, Inc., became the nation’s only African American-led SBA designated Small Business Lending Company.
About 1863 Ventures
1863 Ventures is a Black-led national business development nonprofit accelerator and venture capital fund for New Majority Founders (i.e., individuals who have been historically underestimated, including Black and Latino men and women). The District of Columbia-based organization supports over 3,200 entrepreneurs across the United States, leveraging capital investments, owned curricula, grant funding, as well as corporate and philanthropic partnerships to scale businesses from high potential to high growth. 1863 Ventures’ mission is to bridge the gap between entrepreneurship and equity to steward economic development and generate $100 billion of New Majority wealth by 2030. Learn more at 1863ventures.net.