As part of their $ 50 million Brooklyn Social Justice Fund set up during the protests last summer, Joe and Clara Wu Tsai set up a fund to fund low or zero interest rate loans to small businesses for people of color in the area.
Both Christian Winfield of the Daily News and Randall Williams of Sportico reported on Thursday.
The program, dubbed EXCELerate, aims to fund BIPOC small business owners who would otherwise be ineligible for loans because of their credit rating.
“We really want to solve as many systemic problems as possible,” said Clara Wu Cai in an interview. “With that in mind, and hearing that black businesses were closing twice as fast as white businesses during the pandemic, I saw a real opportunity.”
Joe Tsai tweeted that he is proud of the program … and the app …
In particular, Winfield writes, the program offers several funding options.
EXCELerate targets small business owners BIPOC with a credit rating below 620 for what the Fund calls “individual” loans: either a “Fast Recovery” micro loan of up to $ 15,000 with a zero interest rate or a “Restart” loan. up to $ 100,000 with only 2% per annum.
Wu Tsai noted that a study by the Federal Reserve Bank of New York found that approximately 41 percent of black-owned businesses closed between February and April 2020, compared with only 17 percent of white businesses that were forced to close their doors. This level of business turmoil has affected not only business owners but workers as well.
Gregg Bishop, who has served in the administration of Bloomberg and DiBlasio helping small businesses, is the program’s executive director. He explained the key difference in Tsai’s program.
“Literally, if you need to get a loan, you must have a good credit rating, you must have collateral and / or you need a guarantor,” Bishop told the Daily News. “We have statistics that show that nearly half of black Americans have a credit rating below 620, which means that this automatically excludes them from the traditional capital market.”
Instead, the program will ask borrowers for a reference to a “character”, which could be a religious leader (priest, imam, rabbi, etc.), another business owner, or someone else who can talk to the borrower’s character.
For Wu Tsai and her husband’s foundation, this is just the latest attempt to redress inequalities in American political and economic life. She is one of the founders – and key financiers – of the REFORM Alliance, which is trying to reform the national criminal justice system, in particular on parole and probation. in some cases, successfully lobbying state legislatures to change the law. Mick Mill and Jay-Z are among the other founders of the Alliance. Overall, the Tsai have invested tens of millions of dollars in various social and economic justice initiatives.
Representatives of the charity community and representatives of small businesses praised Wu Tsai’s leadership, the work of the Foundation and the new role of the Bishop in it:
“Small businesses are the lifeblood of our communities, and it is our BIPOC-led businesses and the areas that depend on them that are most affected by the pandemic,” said Darren Walker, president of the Ford Foundation. “Our role as philanthropists is to promote fairness and justice in the most difficult times, and when good investments help people overcome adversity and return to solid ground, this is pure philanthropy.
“I applaud my friend Clara Wu Tsai for her vision and leadership and know that Gregg Bishop’s deep commitment to New Yorkers will help bring stability to those who need it most.”
Wu Tsai, a daughter of immigrants who was born in Kansas, said she is still guided by the words of the Pledge of Allegiance that they uttered every day as children.
“The inequality has intensified and it really has become evident,” Wu Tsai told Winfield. “But as someone who still clearly believes in these ideals, I still believe that it is possible. I want to make sure that these ideals exist and are real, so in my small part, I can correct some of the injustices in the community that I really care about. “