$100,000 contribution will enable California Downtown Association to expand access to capital for underserved entrepreneurs
Today, the California Downtown Association (CDA) and Citi Community Development (CCD) announced Capital Connections, a new initiative to promote economic development by increasing access to financing for small businesses with gross revenues of $1 million or less.
“Small business lending is a key driver of the California economy and job growth,” said Brook Taylor, deputy director of the Governor’s Office of Business and Economic Development (GO-Biz). “Citi and the California Downtown Association should be commended for providing critical financing opportunities to small business owners that might not otherwise have access to capital.”
California, with unemployment at approximately 12%, has a strong need for job creation, including in the communities targeted by Capital Connections: Fresno (15.7% unemployment), Los Angeles and Long Beach (11.9%); and Sacramento (10.9%). The ultimate goal of the initiative is to create or retain 250-300 jobs in Business Improvement Districts. CDA will work with these Business Improvement Districts to implement the program, measure its impact and develop a set of best practices so that the model can be replicated across California.
“At Citi, we share Capital Connections’ commitment to supporting small businesses and providing them with the resources they need to grow and succeed,” said Rebecca Macieira-Kaufmann, President of Citibank California. “By working with Business Development Districts, this innovative program will help drive permanent job creation and retention in low- and moderate-income areas.”
With funding from Citi, CDA will conduct marketing, training and outreach to connect small businesses located in the target Business Improvement Districts with Community Development Financial Institutions (CDFIs), which can provide the needed financing. This will provide them with access to technical assistance and capital that is unavailable for businesses of this size or stage through traditional financial institutions.
“Capital Connections makes the critical link between small businesses and the strategic advisory services and capital they need to grow,” said Bob Annibale, Citi’s Global Director for Community Development and Microfinance. “The California Downtown Association and its member Business Improvement Districts are building an innovative model that we think can be replicated in cities across the U.S.”
The program will help Business Improvement District staff better understand both the capital needs of their small business members and the requirements of CDFIs. Valley Economic Development Corporation, a leading California-based CDFI focused on small business lending, will play a leadership role in developing a formal referral network for Capital Connections.
“Through this partnership and Citi’s generous support, we can create business growth tools that will be very impactful,” said John Lambeth, President of the California Downtown Association. “Working together, we will empower the Downtown Associations’ small business members with the critical technical and financial resources they need to grow their businesses and to drive overall job growth in the target communities.”
The announcement was made at the 32nd annual conference of the California Association for Local Economic Development, held in Sacramento on March 21 and 22, 2012, where industry experts and state leaders discussed economic development solutions for local businesses and communities.
BIDs are quasi-public entities established to provide services and promote economic development within a designated district. As locally-based organizational structures that are responsive to district interests and satisfy community needs, BIDs are very effective in promoting downtown areas as viable sites for ongoing reinvestment.