JPMorganChase Lends $10M to ACE, the Largest Lending-Capital Investment in the CDFI's 26 Years

JPMorganChase is putting $10 million of long-term, low-cost lending capital into ACE | Access to Capital for Entrepreneurs, the Georgia-based community development financial institution, in a deal announced Wednesday at the bank's Make Your Move Summit in Atlanta.

The loan is expected to help ACE finance approximately 70 small business loans across Georgia, with at least $7.5 million of the capital deployed in Metro Atlanta. ACE, founded 26 years ago, lends to small businesses including those in low-income and high-poverty urban and rural areas, the borrowers least likely to clear a conventional bank underwriting box.

The deal

For ACE, the headline number is not the $10 million itself. It is what the commitment represents on its balance sheet.

"As the largest single investment of lending capital in our 26-year history, JPMorganChase's support will help us to reach more entrepreneurs with the affordable capital and support they need to grow, create jobs, strengthen families and revitalize communities across Georgia," said Martina Edwards, ACE's president and CEO.

The structure matters as much as the size. Long-term, low-cost debt is the raw material a CDFI lends from, and patient capital at a low cost of funds is what lets a mission lender price loans that work for thin-margin borrowers. JPMorganChase previously provided $75,000 in philanthropic grant support to ACE for its small business advisory services and Women's Business Center.

The loan is part of the firm's American Dream Initiative, a multi-year effort that includes a goal of powering 10 million small businesses nationwide, up from seven million served today.

More than the loan

The capital announcement arrived with two operating commitments in Atlanta. JPMorganChase plans to increase its business banker coverage in the city by 11 percent over the next five years, and to grow its Senior Business Consultant team to expand Coaching for Impact, its free one-on-one consulting and executive coaching program. More than 15,000 business owners have graduated from the program nationally, including more than 450 from Atlanta, and the firm plans to graduate more than 700 additional Atlanta owners over the next five years.

"Many small businesses are ready to grow but may not be at the right stage of their journey to access financing through traditional channels," said Michelle Egan, the firm's Head of Credit Solutions, Impact Finance. "By strengthening community lenders, we can help more business owners secure flexible capital, grow their businesses, and serve as economic engines in their communities."

Why it matters

This is the bank-to-CDFI capital channel working exactly as designed. A money-center bank supplies patient, low-cost debt at a scale a community lender cannot raise on its own, and the CDFI supplies the underwriting judgment, the local presence, and the borrower relationships that a national bank cannot replicate at a $100,000 loan size.

The demand side of that equation is not in doubt. The median small business holds 27 days of cash buffer, and a quarter of firms hold 13 days or fewer, which is why how many days a business could run on empty is the number that decides who survives a slow quarter. Flexible CDFI capital, priced off cheap long-term funding, is one of the few products built for borrowers living on that margin.

The open question is pace. Seventy loans is meaningful for ACE and for the Georgia businesses that receive them. Against the capital needs of the state's smallest firms, it is also a reminder of how much of this market still runs on one commitment at a time.