American Express is putting $40 million into a fund that will provide loans and other resources to underfunded small-business owners in the U.S., with a focus on minority-owned companies.
The loans, ranging from $5,000 to $100,000, depending on business’ needs, started going out this week, CNBC reported.
The average amount of the loans is expected to be approximately $28,000, according to CNBC, citing forecasts from the fund.
American Express announced the program with Accion Opportunity Fund last month, with a stated goal of accelerating small business growth and “building a more equitable financial system."
The fund will focus on historically underfunded small-business owners, such as people of color, women and immigrants.
Accion Opportunity Fund estimates that American Express's $40 million investment, the largest the nonprofit has received since its inception, will help produce more than $125 million in loans for small businesses, assist in creating and retaining more than 10,000 jobs and “create a ripple effect in economic activity” as money moves through local communities and is repaid, according to the press release.
“Our intention is to look at underfunded small businesses that are really looking to get stronger, to reopen, to stabilize and grow in 2021 and beyond,” Luz Urrutia, CEO of the Accion Opportunity Fund, told CNBC.
“[Businesses] we know are trying to invest, buy inventory, perhaps pivot, and they need reasonable terms and credit to get back on their feet,” Urrutia added.
The fund will, in part, focus on Black-owned businesses, following Accion Opportunity Fund's commitment last summer to accelerate their programs to help more Black-owned businesses "recover, rebuild, and regenerate."