As part of their $50 million Brooklyn Social Justice Fund, set up during last summer’s protests, Joe and Clara Wu Tsai have set up a fund to finance small business loans to people of color in the borough, with either low interest or no interest.
Both Kristian Winfield of the Daily News and Randall Williams of Sportico reported on the move Thursday.
Called EXCELerate, the program is aimed at funding Black Indigenous People of Color (BIPOC) small business owners who would not otherwise qualify for loans due to their credit score.
“We really want to address as many systemic issues as possible,” Clara Wu Tsai said in an interview. “With an eye to that and also hearing that black businesses closed at twice the rate as white businesses during the pandemic, I saw a real opportunity.”
Joe Tsai tweeted out his pride in the program ... and the application...
Specifically, Winfield wrote, the program offers a couple of financing options.
EXCELerate targets BIPOC small business owners with a credit score of lower than 620 for what The Foundation is calling “character-based” loans: either a micro ‘Rapid Recovery’ loan of up to $15,000 with zero percent interest, or a ‘Restart’ loan of up to $100,000 with only 2% interest.
Wu Tsai noted a New York Federal Reserve Bank study found that an estimated 41 percent of black-owned businesses shut down between February and April 2020, compared to only 17 percent of white businesses that were forced to close their doors. That level of business upheaval affected not just the business owners but workers.
Gregg Bishop, who worked in the Bloomberg and DiBlasio administration helping small businesses, is the program’s executive director. He explained a key distinction that the Tsai’s program has.
“Literally, if you need to get a loan, you need to have a good credit score, you need to have collateral and/or you need to have a guarantor,” Bishop said in an interview with the Daily News. “We have stats that show (that) almost half of Black Americans have a credit score that’s under 620, and that means that it automatically excludes them from the traditional capital market.”
Instead, the program will ask borrowers for a “character” reference which can be a religious leader (a priest, imam, rabbi, etc.), another business owner or someone else who can speak to the borrower’s character.
For Wu Tsai and her husband’s foundation, this is just the latest effort to rectify 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 nation’s criminal justice system, particularly the parole and probation. lobbying state legislatures in some instances with success to change the law. Meek Mill and Jay-Z are among the other founders of the Alliance. Overall, the Tsais have contributed tens of millions of dollars to various social and economic justice initiatives.
Members of the philanthropic and small business community praised Wu Tsai’s leadership, the work of the Fund and Bishop’s new role within it:
“Small businesses are the lifeblood of our communities, and it’s been our BIPOC-led businesses, and the neighborhoods that depend on them, who have been hit hardest by the pandemic,“ said Darren Walker, President of the Ford Foundation. “It’s our role as philanthropists to promote fairness and equity in the most trying times, and when good investments help people to overcome challenges and get back on solid ground, that’s philanthropy in its purest form.
“I applaud my friend Clara Wu Tsai for her vision and leadership, and know that Gregg Bishop’s deep commitment to the people of New York City will be instrumental in providing stability for those who need it most.”
Wu Tsai, the daughter of immigrants who was born in Kansas, said she is still guided by the words of the Pledge of Allegiance they recited every day as a child.
“The inequities got worse, and they really became exposed,” Wu Tsai told Winfield . “But as someone who still clearly believes in these ideals, I still really believe that it’s possible. I want to make sure that these ideals exist and in reality, so in my small part, this is the way that I can correct some of the inequities in a community that I really care about.”
- Clara Wu Tsai’s EXCELerate is a ‘win-win-win-win’ for Brooklyn and Black business - Kristian Winfield - New York Daily News
- NETS OWNERS BEGIN $50 MILLION SOCIAL JUSTICE PLEDGE WITH BUSINESS LOANS - Randall Williams - Sportico