Seattle -- Starbucks Coffee Company is teaming up with the Opportunity Finance Network (OFN) to launch a “Create Jobs for USA” fund.
Starting Nov.1, the new initiative will pool donations from Starbucks customers, partners (employees) and citizens into a nationwide fund for community business lending. One-hundred percent of the donations will go toward loans for firms and organizations that can add jobs or stem job losses, Starbucks said.
OFN represents a nationwide network of 180 Community Development Financial Institutions (CDFIs) set up to provide financing to community businesses in underserved markets where accessing credit through traditional lending institutions is challenging or not available. The new fund will be seeded with a $5 million contribution from the Starbucks Foundation. Starbucks is covering the operational costs to get loans out through the program.
“Small businesses are the backbone of America, employing more than half of all private sector workers – but this critical jobs engine has stalled,” said Starbucks CEO Howard Schultz. “We’ve got to thaw the channels of credit so that community businesses can start hiring again. Create Jobs for USA empowers Americans to help other Americans create and sustain jobs, with Starbucks and OFN as a catalyst and the Indivisible wristband as a symbol of our country’s unity.”
Opportunity Finance Network works with 180 financial institutions -- banks, credit, unions, loan funds and venture capital funds -- that give loans in low-income communities that don't have easy access to credit. The organization, created 27 years ago, has invested $23.2 billion and generated nearly 300,000 jobs through 2009.
Loans through the network have supported everything from charter schools to grocery stores nationwide. The organization found that, even during the recession, more than 98 percent of the money loaned out has been repaid, which is in line with traditional lenders.
Through the program, businesses will apply to financial institutions, which along with the Opportunity Finance Network will assess their potential for adding jobs. Preference will be given to applicants who can add jobs within six months. An outside organization will audit the program within a year.