Starbucks Launches $100 Million Fund To Support SMBs

Starbucks announced on Tuesday (Jan. 12) that it is investing $100 million from now through 2025 to support small businesses located in minority neighborhoods.

The aim of the Starbucks Community Resilience Fund is to support SMBs in areas “with historically limited access to capital,” the release said, to promote racial equality and environmental resilience.

In coordination with partners like the Opportunity Finance Network (OFN), Starbucks will deliver funds to local Community Development Finance Institutions (CDFIs) to provide small businesses and neighborhood projects with access to capital.

“CDFIs deliver affordable credit as well as training on disaster recovery and rebuilding – and that is exactly what small businesses need right now to withstand ongoing economic and climate changes,” said OFN President and CEO Lisa Mensah in the press release.

Access to capital is especially important amid worries of a second lockdown.

Recent PYMNTS data reveals that while Main Street SMBs are relatively more optimistic about surviving the pandemic than they once were, 55 percent still report feeling “not at all” or “somewhat” sure they could stay open through another lockdown.

And lacking access to cash has caused a significant impact on Main Street SMBs: PYMNTS found in August that 76 percent of SMBs had experienced cash flow shortages during the pandemic.

The fund will begin allocating capital in 12 metropolitan areas, including New York City, Atlanta, the San Francisco Bay Area and Washington, D.C. It will also offer mentorship and technical support, according to the press release.

The new Starbucks Community Resilience Fund is an expansion from a 2019 commitment the company made to invest $10 million in four CDFIs based in Chicago, the release noted.

“Thanks to their investment, Chicago’s CDFIs, such as Accion, CCLF and more, will be able to both continue the necessary work of increasing access to funding for our small businesses – especially those located in neighborhoods struggling with historic disinvestment – and support our ongoing, citywide efforts to provide COVID relief grants to our business community,” Chicago Mayor Lori E. Lightfoot was quoted in the release as saying.