TCF Bank offers $1 billion in loans to minority-owned businesses
TCF Financial Corp. will provide $1 billion to minority and women-owned small businesses and $10 million in grants to low-income homebuyers.
The Detroit-based banking program said Thursday it was a public first step after pledging with the city’s other eight largest companies to reject all forms of racism, sexism and violence and to seek change in the criminal justice system in the wake of nationwide protests over the death. of Minneapolis man George Floyd after improper conduct by police officers.
“These programs address the systemic racism that has robbed too many of their share of the American dream, the opportunity to own a business and the opportunity to own a home,” TCF Executive Chairman Gary Torgow said during of a press conference. “Today, we humbly reinforce our commitment to right historic wrongs with a lending program that is bold in size and ambition.”
The five-year programs will provide up to $1 million in small business loans. The program will be open nationwide, though TCF plans will focus its efforts in Detroit, Minneapolis, St. Paul, Chicago, Cleveland, Grand Rapids and other key cities in its markets.
“It means dramatically more access to people and communities long deprived of their fair share,” Torgow said, noting that black business owners are twice as likely to be turned down for loans and significantly more likely to be denied full funding.
The terms of the loans have not yet been set, but the bank is aware that it must offer favorable rates to the communities and businesses it will serve, said TCF spokeswoman Randi Berris. Further details on how to apply will also be available shortly.
Qualified buyers for its Heart and Home Program can receive up to $3,000 without reimbursement if they earn less than 80% of the area median income or if they buy homes in a low-to-moderate income census tract. The bank hopes to fund 750 such grants in 2020, more than double the roughly 300 it gave out last year.
The funds are intended to pave the way for neighborhood stabilization by providing funds for a down payment that is “the biggest barrier to homeownership,” TCF CEO Craig Dahl said in a statement.
TCF plans to fund the initiatives with proceeds from the 16,000 Paycheck Protection Program loans it has offered amid the COVID-19 pandemic. More than half were in Michigan.
Detroit Mayor Mike Duggan noted the city was one of the few places historically for African Americans to create wealth. Previous commitments from TCF management have helped to do this again.
And last year it acquired the naming rights to the downtown Cobo Center convention venue in a $33 million deal. “They replaced the name of our convention center from someone who drove African Americans out of their homes,” Duggan said, “in the name of an institution making black ownership accessible again.”
The programs are an extension of the bank’s previous commitments since its predecessor, Chemical Financial Corp., decided in 2018 to move its headquarters to a 20-story, $105 million mixed-use building on Woodward Avenue in downtown. -town, near Comerica Park.
“Not only are you building a new home to place your headquarters in the heart of downtown Detroit, but you’re really establishing a new home,” said Reverend Wendell Anthony, president of the Detroit chapter of the NAACP who inspired companies to make their public decisions. promises in June. “For it is from home that individuals grow, prosper and achieve their purpose. Your commitment to strategic partnerships, philanthropy and service is a prime example of this.”
Prior to its merger with TCF, Chemical also brought together seven companies to support the Strategic Neighborhood Fund by each adopting a neighborhood and supporting the city’s development work with a $5 million financial commitment.
TCF has embraced the Grandmont Rosedale neighborhood, where a bookstore, art gallery, bridal boutique, grooming center, cafe and more have opened.
“All of this has been put at risk with COVID-19, but with a commitment like this, we believe our community will continue to thrive,” said Sherita Smith, General Manager of Grandmont Rosedale Development Corp. “While there are a number of challenges to owning and operating a small business, without fail, these savvy and persistent entrepreneurs will tell you that access to capital is the #1 challenge. This challenge can be especially daunting for minority-owned businesses.
Working with Wayne County in March, TCF also offered a $10 million loan program to provide quick relief through low-interest loans to support local small businesses impacted by the pandemic. It put cash in their hands in a week as federal funds slowly trickled in, Wayne County General Manager Warren Evans said.
“Through this partnership, we’ve been able to put millions of dollars into the hands of hundreds of small businesses,” he said. “Public-private partnerships like this are the key to success in moving forward and prospering as a region.”
This program inspired this next step that TCF is taking, Torgow said.
“But for most of us,” he said, “this is a time to recognize that none of us will be truly free until we are all truly equal.”