TD Bank is committing $100 million to minority-owned small-business lending, the bank announced last week, according to American Banker.
The bank said the new equity fund will invest $75 million in specialized small-business investment companies aimed at assisting minority- and women-owned small businesses and those that operate in underserved communities.
The remaining $25 million will go to Black- and Hispanic-owned businesses to be funded through community development financial institutions (CDFIs), the bank said.
TD Bank’s recent pledge to boost lending to minority-owned businesses comes as a recent report from the Federal Reserve Bank of New York found that many Black-owned businesses, many of which lacked existing relationships with traditional banks, leaned harder on fintechs and nonbank lenders to secure Paycheck Protection Program (PPP) loans.
Michael Innis-Thompson, TD’s head of community lending and development, told American Banker the bank aims to become "the bank of choice for Black and Latin borrowers."
"We are being very purposeful in designing outreach efforts, programs and products to make sure that happens," he said, adding the bank will focus on markets such as Philadelphia, Washington and Miami, areas with large Black and Hispanic communities.
Several other large lenders have announced similar commitments to lend to minority-owned small businesses, a demographic that has historically been underserved by the financial services industry.
Bank of America recently announced it would increase its commitment to minority entrepreneurs to $350 million, after surpassing the $200 million goal it set last year.
The Charlotte, North Carolina-based bank said last week it committed more than $250 million to 90 investment funds across the U.S. in less than a year.
The bank also completed 17 direct equity investments in minority depository institutions (MDI) and CDFIs as part of a $50 million commitment it made last year.
"Equity investments in minority focused funds, MDIs and CDFI banks help address a persistent gap in access to growth capital," Bank of America CEO Brian Moynihan said in a statement. "By providing this capital, we’re helping to level the playing field and open more doors for minority led businesses, entrepreneurs and innovation."
Pittsburgh-based PNC, which on Tuesday announced the completion its $11.6 billion acquisition of BBVA, unveiled an $88 billion community benefits plan in April that will provide loans, investments and other financial support to low- and moderate-income (LMI) individuals and communities of color over a four-year period beginning next year.
The bank said the initiative was developed in connection with the anticipated regulatory approval and closing of its acquisition of BBVA.