Bank of America teams up with the Tory Burch Foundation to offer $100 million in loans to women entrepreneurs
Bank of America is pledging $100 million to the Tory Burch Foundation Capital Program to help female entrepreneurs get access to much needed capital.
"Women entrepreneurs face many obstacles, access to capital being the biggest and the most common," Tory Burch, founder of the Tory Burch Foundation, told CNBC Make It via email. "I was incredibly fortunate — we were able to launch after a personal investment and one round of fundraising. This, of course, is not the case for most women."
In 2018, 40 percent of privately held firms in the U.S. were women-owned, according to the American Express 2018 State of Women-Owned Business Report. Still, just 2 percent of venture capital dollars went to female founders last year, according to Pitchbook.
"This has to change," said Burch. "It takes more than a great idea and determination to start a business; it takes resources."
More than 2,500 women business owners have received $46 million in loans through the program over the past five years. Over 90 percent of the businesses receiving capital through the program are still in business and current on their loan repayment.
"We want to continue to scale this support by committing another $50 million in capital," Andrew Plepler, global head of environmental, social and governance at Bank of America, told CNBC Make It via email. "By empowering more women to start and scale a business, we are contributing to the economic progress in communities across the country."
"I am so proud of what these women have been able to achieve, and watching their success manifest in concrete, tangible ways — hiring more employees, leasing bigger office spaces, expanding their product lines — is incredibly gratifying," said Burch.
Borrowers can take loans between $500 and $100,000 through the program, which offers a 2 percent interest rate reduction. To qualify, applicants must already be running a business for a least two years, and have positive revenue and a satisfactory credit rating.
"This model is more scalable than providing grant funding alone and helps these women and their businesses to build credit at the same time," said Plepler.
The Tory Burch Foundation says the loans have gone to women-owned businesses across all sectors and industries — from bakeries to manufacturing plants, doctors to chefs — some with annual revenues of $10,000, and a few with annual revenues of as much as $500,000.
"It is rewarding to see the impact these loans are having in womens' lives," said Burch. "I could not be more proud, watching these women scale their businesses and become leaders in their communities."
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