Lender debuts grant program for smallest of small businesses in Los Angeles
Protests over racial injustice in recent weeks spurred TMC Financing to create a $750,000 grant program supporting microbusinesses that are often women and minority owned.
TMC Financing funded more than 1,100 SBA Paycheck Protection Program loans totaling $105 million for small businesses. Those loans become grants when the money is used for payroll and other eligible expenses.
But the lender saw an opportunity to assist some of the smallest of small businesses in Los Angeles, San Francisco and Oakland, many of which weren't eligible or didn’t participate in the SBA’s relief program.
“The stories of the struggles facing our very small businesses are heartbreaking, and I wanted to do more, especially for women and minority-owned businesses that weren’t able to access the federal funding,” TMC Financing’s founder and CEO Barbara Morrison told me.
“I held a town hall meeting with my staff to discuss how to take action to help heal some of the hurt in our community,” Morrison said, adding that the company’s Oakland headquarters on Broadway provided a front-row seat to the Black Lives Matter protests in that city.
“We don’t work in the social justice world. I view our lane as economic justice,” Morrison recalled telling her staff at the company’s town hall meeting. “So what is it that we could do that would be meaningful?”
The microbusiness grants and a TMC Financing internship program were among the ideas employees suggested.
Signature Bank (NASDAQ: SBNY), which recently expanded its Bay Area presence, donated $250,000 to the grant program, and TMC Financing contributed $500,000. Morrison said she’s talking with other potential donors.
TMC Financing, which is based in Oakland, also created a paid internship program, working with California State University, East Bay and Golden Gate University in San Francisco. Two of the three students in TMC’s first class of interns are African-American.
“We know we have to hire and train with intention,” Morrison said. TMC Financing helps small business owners secure SBA financing to purchase real estate, often the premises of their businesses.
The grant program for microbusinesses in San Francisco, Oakland and Los Angeles is handled by TMC Financing affiliate TMC Community Capital, a nonprofit online microlender that works with underserved businesses in California, with a focus on those owned by women of color.
TMC Community Capital makes loans of $5,000 to $50,000 to microbusinesses, providing business training and tools to support borrowers.
TMC’s grant program is a bit unusual in that nominations are accepted with an initial one-page application that consists of about five questions. Recipients for grants of up to $10,000 are selected by lottery.
With many of these microbusiness owners struggling to cope with the Covid-19 economic fallout, Morrison said she was eager to keep the application process simple.
“This allows the community’s voice to be heard, as well as takes some of the application burden off the small business,” Morrison said. “I have heard that there’s a little bit of grant fatigue or loan fatigue. Many small businesses have been scrambling just trying to find out what’s available and how to apply.”
The nominations are posted on social media, so a microbusiness benefits from the publicity, regardless of whether they receive a grant.
“We wanted to build a program that was easy and equitable, so we are turning to members of the community and asking them to champion the small businesses they love,” Morrison said. “We hope to serve 100 of the most vulnerable businesses with the majority of them owned by women of color.”