Will Bank of America’s $1 billion investment in local economies grow tenfold?

Will Bank of America’s $1 billion investment in local economies grow tenfold?
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The news spread rapidly in June when Bank of America announced it was making a $1 billion, four-year commitment to help local communities address key issues such as economic and racial inequality that have been accelerated by the coronavirus pandemic.

This landmark program is focused on helping people and communities of color who have experienced a greater impact from the health crisis, Bank of America officials said. Officials outlined four main areas of focus for these funds: Health; Jobs/Training/Reskilling/Upskilling; Support to small businesses; and Housing.

In the subsequent months beyond its June announcement, Bank of America’s Matt Elliott, the Michigan Market President and Region Executive, has been spreading the news of the $1 billion commitment and how it will impact cities including Detroit, Flint, Pontiac, West Michigan and others seeking to build entrepreneurial pipelines, job-training programs and housing developments.

Elliott’s most important message has focused on Bank of America’s deep commitment to these issues, to communities of color and to boosting participation from other organizations to its own efforts, hopefully enhancing its $1 billion commitment tenfold, Elliott said.

“This is not new. We didn’t wake up and realize this is something we needed to work on (or) that this is a check-writing exercise,” Elliott said. “We have a deep commitment to inclusion and economic mobility. … We also want to attract others to see if we can take a billion dollars and turn it into 10.”

Seeking ways in which to support and grow small business and the entrepreneur ecosystem in Michigan is a key component to what Bank of America’s billion-dollar commitment, Elliott added.

Bank of America’s Michigan President Matt Elliott says his company’s commitment to communities of color is not new. He hopes that by attracting other investors, BOA can help make its $1 billion dollar investment morph into 10. Photo courtesy of BOA

“Small businesses are really critical because they’re the growth engines of the economy. They’re the job creators,” Elliott said. “Bank of America is the largest lender to small businesses, and we have a large commitment to Michigan and Detroit.

“Just like the rest of coronavirus, COVID-19 has had a disproportionally large effect on small business and businesses of color,” Elliott said. “Many of these entrepreneurs didn’t grow up in an environment with other entrepreneurs. They didn’t get that support. Personally, I think that’s one reason why in the first round of (Paycheck Protection Program) loans we didn’t see as many businesses owned by people of color as larger businesses. That has put many shops, restaurants and industries at risk.”

Capital or monetary support is just one facet of this kind of recovery, Elliott added. This is where Bank of America truly shines in that it offers other types of support including advice, technical insights, educational efforts and more.

“I’m confident we will do the work to put these billion dollars into action the best way we can,” Elliott said.

Bank of America’s Matt Elliott, the Michigan Market President and Region Executive, has been spreading the news of his company’s $1 billion commitment and how it will impact cities including Detroit, Flint, Pontiac, West Michigan and others seeking to build entrepreneurial pipelines, job-training programs and housing developments. Photo courtesy of BOA

Another area of support for minority-owned business is through education, Elliott said. Programs such as Bank of America’s Better Habits curriculum that has a lot of information for small businesses are important as well as the bank’s efforts to share its top research about key business topics such as supply chain.

For home ownership, Bank of America also is working hard on its commitment to boosting home ownership in low- to moderate-income areas. It has developed low down payment mortgage products, community development lending and placemaking projects in developing neighborhoods such as Jefferson-Chalmers in Detroit.

“That’s really where our four pillars fit together,” Elliott said. “It starts with healthcare with better outcomes for people not only of color but on the lower economic spectrum. Then it centers around housing and community development lending. You have to look at jobs next – upskilling and reskilling. The last piece is small-business support. You need to be healthy, have a place to work, a place to live and jobs nearby.”

A $1 billion commitment over four years is a huge number and a long timeframe, Elliott said, but it will take every person within the organization to make it happen.

“Can you be a big bank and do good locally? That’s something that we talk a lot of about in the company. Yes, you can,” Elliott said. “Sometimes, these are the kinds of things only big organizations can do because of size and scale. But (these programs) also have to be responsive to real issues and to constituents as well as to our clients and the community.”

Historically, Elliott said Bank of America within Michigan has been working on these programs and support structures for years. For example, Bank of America officials saw that it wasn’t doing enough to get its fair share of mortgages in the city of Detroit, even with an attractive set of products aimed at first-time homebuyers.

To solve this problem, Bank of America realized it needed more employees to be closer to Detroit’s residents and get into the neighborhoods. It hired community mortgage consultants whose whole jobs is to enable and enact these kinds of programs at a neighborhood level. Bank of America also organized a listening tour with Detroit and with its major small-business support groups to see what people were seeing and hearing.

Bank of America also hired its first small-business banker with more on the way to “specifically orientate toward small businesses in Detroit,” Elliott said. “Robert is from Miami and he’s bilingual. He’s off to a great start and we’re thrilled to have him on the team.”

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