In Virginia, small businesses employ 47% of working adults—businesses that have been hit hard by the coronavirus. In March 2020, the state’s unemployment rate was 3.3%. One month later, it had jumped to 11.2%.footnote1
Unemployment rates in the Black community rose even more—African American workers accounted for nearly 27% of unemployment claims, despite making up 18.5% of the workforce. As business closures resulting from the coronavirus amplified existing inequality in the region, financial assistance like the services offered by Virginia Community Capital (VCC) became more critical to shore up and eventually rebuild the state’s small business community.
Economic support where it’s needed
VCC is a community development financial institution (CDFI) established in 2006 with an initial $15 million investment from the state, and empowered to create economic opportunity in underserved communities. “We have turned the original investment into more than $1 billion in statewide impact,” says Leah Fremouw, director of community innovation and marketing at VCC. Like CDFIs across the country, VCC provides capital, mentoring and financial advice to small businesses and nonprofit organizations in underserved, primarily lower-income communities.
“For many small businesses without traditional banking relationships, we’ve been the onramp to the mainstream banking highway,” explains Fremouw. “We help them access the support—financial or otherwise—they need to succeed. And right now, those businesses need our help more than ever.”
When the coronavirus reached the communities VCC serves, Fremouw knew that VCC would need to significantly step up its assistance. The organization responded by offering help processing and securing Paycheck Protection Program (PPP) loans, as well as through counseling and enhanced financial literacy services. In just a few months, Leah and her colleagues at VCC issued almost $30 million in PPP loans, helping more than 300 Virginia businesses avoid closure and retain more than 3,500 jobs.
