TD Bank commits $ 100 million for minority small business loans
“We want to get the money out as quickly as possible,” said Michael Innis-Thompson, TD’s head of community lending and development. Indeed, the bank hopes that its SSBIC initiative will be operational before the end of 2021, while funds for CDFIs are expected to be allocated over the next year. TD has earmarked an additional $ 25 million specifically for black and Hispanic-owned businesses, which will be funded by community development finance institutions, which it says are “uniquely good” at serving businesses in communities of color.
According to Innis-Thompson, TD plans to focus on the markets it serves that are home to large black and Hispanic communities, such as Philadelphia, Washington and Miami. The goal is to channel loans into the hands of minority entrepreneurs that TD normally can’t help on its own – and get them to turn their businesses over to the bank. In announcing its new equity fund, TD joins a growing list of banks interested in supporting minority small businesses.
CDFIs and SSBICs “are very good at helping businesses obtain financing … and their credit criteria are a bit more flexible than that of a traditional bank,” added Innis-Thompson. “They are able to serve the community in a way that the banks cannot.” Last week, Bank of America, which had pledged to invest $ 200 million in funds focused on minority small businesses, announced plans to increase its pledge to $ 350 million.
TD, with $ 411.6 billion in assets, is already a leading lender in small business administration in its footprint, which spans from New England to Florida. At the same time, “there are small businesses that are either startups or don’t necessarily meet our credit standards,” Innis-Thompson said. “We would like to be the bank of choice for black and Latin borrowers,” said Innis-Thompson. “We are very committed to designing outreach efforts, programs and products to make sure this happens.”
The increased support for minority-owned small businesses highlights the increased attention banks across the country have been paying to racial equity issues since the murder of George Floyd last year. At the same time, PNC Financial Services Group in Pittsburgh, Huntington Bancshares in Columbus, Ohio, US Bancorp in Minneapolis and BMO Harris Bank in Chicago have embarked on similar initiatives in recent months.
TD Bank is a unit of the 166-year-old Toronto-Dominion Bank based in Canada. “Small businesses are at the heart of our communities, especially communities of color,” added Braca. “It’s up to us to help them succeed.” TD’s equity fund “will eventually inject capital and help stabilize [minority] small businesses, but it’s also about… breaking the cycle of divestment that consistently prevents communities of color from thriving, ”CEO Greg Braca said in a statement.
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