News

Starbucks invests millions in Chicago small businesses

Photo courtesy of Starbucks

October 29, 2019

Starbucks Coffee Company is investing $10 million in four community lenders to drive economic opportunity in Chicago, according to a company press release.

The investment will help finance more than 500 loans to foster growth in small business, support community development projects and create more jobs in Chicago's underserved communities, said Starbucks CEO Kevin Johnson.

"We believe the pursuit of profit is not in conflict with the pursuit of doing good," he said in the release. "We know that our business performs at its best when the communities we serve are thriving. This sustained investment will provide borrowers who often face barriers with access to capital and mentorship to grow their business and create more jobs in Chicago."

Chicago Mayor Lori E. Lightfoot applauded the decision.

"Chicago's own relationship with Starbucks stretches over three decades, and we are incredibly excited to continue that partnership well into the future, through the 200 new jobs created in the beautiful new Reserve Roastery, as well as across our neighborhoods that aligns to our new INVEST South/West initiative, as we work together to drive investment and access to opportunity for every one of our city's residents and families," she said in the release.

The $10 million investment from Starbucks will be dispersed among Accion Chicago, Chicago Community Loan Fund, Local Initiative Support Corporation and IFF — four community development financial institutions that drive economic opportunity in the city's neighborhoods. In addition to lending, the organizations will provide borrowers with mentoring and technical assistance to ensure the success of their projects, according to the release.

"Our communities are filled with talent and entrepreneurial spirit," said Meghan Harte, executive director of LISC Chicago, which has invested more than $970 million in grants, loans and equity throughout Chicago. "What they often lack is access to the right kind of capital so that entrepreneurs can launch, build and grow. With this investment, Starbucks is supporting a broadly shared prosperity that will deliver clear benefits to residents, while making our neighborhoods safer and stronger."

This investment follows Starbucks Create Jobs for USA initiative in partnership with the OFN in 2011. The program was dedicated to creating and sustaining jobs in underserved communities throughout the U.S. bolstered by a $5 million philanthropic contribution from the Starbucks Foundation. In three years, it raised more than $15 million in donations, which participating CDFIs turned into $105 million in financing for businesses to create or retain more than 5,000 jobs.

"It provides the capital, coaching and connections that neighborhood entrepreneurs need to create jobs and wealth in underserved communities. In Chicago, entrepreneurs of color and women entrepreneurs need services that traditional financial institutions often can't provide," Brad McConnell, CEO of Accion Chicago, said in the release. "That's what we do, and that's why partnerships with thoughtful organizations like Starbucks are so crucial."

Bank of America will assist Starbucks in deploying the investment to each of the four lenders. The CDFIs are expected to start making loans to small business owners and community organizations by early next year, although borrowers can apply for a loan now. Chicagoland residents can learn more and apply for loans by visiting the respective CDFI websites.

This news comes weeks ahead of the opening the Starbucks Reserve Roastery on Chicago's Magnificent Mile.