Help for small businesses in Old Dominion

Virginia Community Capital reshaped the way it operates to continue revitalizing the communities it serves

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.

Dr. Shantelle Brown

Reasons for Hope

Hope Pharmacy is one of the businesses VCC helped. Located in Richmond, VA’s, East End, a largely African American community where more than 24% of the population lives below the poverty line, Hope is the neighborhood’s only independently and locally owned pharmacy. Richmond native Dr. Shantelle Brown founded Hope in 2019 to serve a neighborhood that had no local drugstore. As the pandemic endangered her business, she turned to VCC, which helped her secure a PPP loan that kept her five employees on the job. Dr. Brown and her team also used that opportunity to help the community by making hand sanitizer, which she distributed at no cost to first responders and sold to local supermarkets to help Hope keep operating.

“We wouldn’t have been able to stay open without VCC,” says Dr. Brown. “It’s not easy to try and find a helping hand—let alone one that understands complex financial matters—during a time of crisis. But VCC came through, and now we can pass it on by helping our community.”

In response to increased need for small business support, Bank of America committed and exceeded $250 million in new capital to CDFIs to provide them with the liquidity needed to make PPP loans to their clients, including to VCC. With a CDFI portfolio of $1.6 billion, and 255 partner CDFIs across 50 states, Bank of America is the largest private lender to CDFIs in the U.S.. To date, Bank of America has been reported by the Small Business Administration to be the largest PPP provider in the U.S. by number of approved loans, distributing $26 billion in loans to more than 345,000 clients, 99% of which has gone to businesses with less than 100 employees.

Learn more about how Bank of America is working with CDFIs to help support small businesses, and the local communities that depend on them, across the United States.

Originally published 11/02/2020