The last decade has seen the establishment of many black-owned businesses across the US. Although it was reported that black businesses were disproportionately affected at the height of the pandemic, some showed significant resilience to stay afloat.
Beyond the pandemic, black entrepreneurs and other minority-owned businesses have faced challenges when raising money to expand their businesses. According to one report, less than one percent of blacks get venture capital funding.
There have been several interventions in this regard to help minority founders to raise money. One such is Macy’s. The company is the largest department store in the United States, according to the New York Times.
The American department store chain plans to invest $30 million over the next five years into three financing channels meant to support businesses run by people from under-represented groups in the retail industry, the New York Times reported.
To achieve this, Macy’s is working with Momentus Capital, which will oversee the loan fund. The retail company said the total financing for these programs would equal $200 million, the Times reported.
The platform adds that money will be given in the “form of a loan for working capital and commercial real estate, as well as growth equity capital.”
“With a lot of these ventures, they’re starting points in helping. We have to just see with time,” said Jessica Ramírez, a retail research analyst at Jane Hali & Associates.
What is more, the retailer has signed the 15 Percent Pledge, requesting retailers to allocate 15 percent of their shelf space to items from Black-owned businesses. Since then, the firm notes that black-owned brands have increased more than eightfold.
“We have emphasized a holistic approach in regard to supporting Black businesses, meaning that we work closely with retailers to identify opportunities, beyond just expanded shelf space, to break down barriers that have systematically held back Black entrepreneurs,” LaToya Williams-Belfort, the executive director of the 15 Percent Pledge, told the Times.
Beyond injecting cash into minority own businesses and the 15 Percent Pledge, Macy’s has trained 200 entrepreneurs for over 10 years.