Financing

Starbucks to invest in community development

The coffee giant is investing $10 million to support small business and economic development loans in Chicago.
Starbucks coffee storefront
Photograph courtesy of Starbucks

Starbucks’ latest investment isn’t in technology or a new brand.

The Seattle-based coffee giant said Tuesday that it plans to invest $10 million in a group of community development organizations that make small business and other community development loans in Chicago.

The investment, coinciding with the opening of the Starbucks Reserve Roastery on Chicago’s Magnificent Mile, is expected to finance more than 500 loans to small businesses in the city’s underserved communities.

“We know that our business performs at its best when the communities we serve are thriving,” Starbucks CEO Kevin Johnson said in a statement. “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.”

The $10 million will be dispersed among four organizations: Accion Chicago, Chicago Community Loan Fund, Local Initiatives Support Corp. and IFF. The organizations are established community development financial institutions that drive economic opportunity in the city’s underserved neighborhoods.

The organizations make loans to help spur economic development. The organizations also provide borrowers with mentoring and technical assistance to ensure their success.

“Chicago’s own relationship with Starbucks stretches over three decades, and we are incredibly excited to continue that partnership well into the future,” Chicago Mayor Lori Lightfoot said in a statement.

The community development financial institutions have more than 150-plus combined years of experience providing capital and financial guidance. They will focus on small businesses, nonprofit organizations and commercial real estate ventures.

The investment follows Starbucks’ Create Jobs for USA initiative in partnership with Opportunity Finance Network, or OFN, in 2011. That program was dedicated to creating and sustaining jobs in underserved communities throughout the U.S. That program raised more than $15 million in three years and helped create or retain more than 5,000 jobs, the company said.

Bank of America will help Starbucks deploy the investment to the four lenders. The organizations will start making loans early next year.

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