Bank of America has launched an online platform to help entrepreneurs and small-business owners establish and sustain their enterprises, the bank announced Wednesday.
The platform, called Access to Capital Connector, was built in partnership with Community Reinvestment Fund, USA, a national nonprofit community development financial institution. The platform links entrepreneurs to more than 150 CDFIs and business support organizations, providing access to capital, coaching and support services.
Applicants must answer a series of questions to become pre-qualified and suggests participants best suited to serve entrepreneurs’ needs, the bank said.
"CDFIs help us extend our reach and provide entrepreneurs with the resources they need to achieve their goals. We have found our extensive network to be highly impactful in fostering economic opportunities for individuals and communities," Pam Seagle, senior vice president of inclusive entrepreneurship for Bank of America, said in a statement.
The Access to Capital Connector arrives about three years after the lender launched the Bank of America Access to Capital Directory series in 2021, which offers small businesses a wide variety of capital resources, including equity, debt and capital. The directory has about 25,000 users, the company said.
Bank of America's new tool is a part of a platform called CRF Connect which has nearly 150 partners collectively funding roughly $500 million in loans to more than 8,500 individual businesses, the bank said.
CRF Connect gathers data and puts it into an algorithm to find potential clients, matching entrepreneurs and CDFIs based on geographic preferences, Bank of America’s website noted.
Many CDFIs and other community lenders usually want to ensure applicants' positive cashflow, but also offer coaching and support for business owners to achieve that, according to responses in the Access to Capital Connector FAQ.
"When small businesses have access to responsible capital and other resources, they create jobs, grow wealth, and provide critical services for communities," Patrick Davis, senior vice president of platform and technology services for CRF, said in a statement. "Bank of America has been a strong partner in CRF's efforts to serve entrepreneurs, especially those with a history of under-representation. The Access to Capital Connector is the latest example of our collaborative work to support a thriving small business ecosystem by streamlining the connection between small business owners and the CDFIs designed to serve them."
Charlotte, North Carolina-based Bank of America will pay an annual licensing fee to CRF to maintain the platform and provide customer service assistance, Davis added.
Bank of America also gave CRF a grant to build the Access to Capital Connector, Seagle told American Banker, without disclosing the amount.
Bank of America pledged $25 million to the National Alliance of Latino CDFI Executives and the African American Alliance of CDFI CEOs in 2022 to support nonwhite-led CDFIs in their networks. Those groups represent more than 130 CDFIs led by people of color.
In a more recent move, State Street in February said it would deposit $100 million into minority depository institutions and CDFIs to increase their lending capacity to the undercapitalized communities they serve.
A study released by the Federal Reserve Bank of San Francisco in December indicates CDFIs are being recognized as effective conduits of capital to underserved communities.
"[A]s banks respond to new rules for community development investments from the recently revised Community Reinvestment Act (CRA) rule, CDFIs may see renewed interest from CRA motivated investors," the report noted.
