Newark’s $100M FAM Fund Wants to Turn the Tide for Black, Latinx Business Owners

Studio Sole, a footwear incubator, is one of the city's partners in advancing economic equity for Black and brown entrepreneurs.

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NEWARK, NJ —  Following the Civil War, freed Black slaves in the United States were denied the “40 acres and a mule” promised to them under the Special Field Orders No. 15, a barrier to capital that set the tone for today’s economic disparities. 

Newark is now repurposing the proclamation as a rallying cry for a $100 million investment fund that plans to put money directly in the hands of minority business owners, the city announced at a Tuesday press conference. The NWK FAM Fund, or “Forty Acres and a Mule” Fund, is seeking to raise the proceeds from the city’s corporate and philanthropic institutions. 

Rev. Al Sharpton, who stopped by City Hall to lend his support, praised Newark for being a standard-bearer for social justice and economic empowerment. 

“We cannot be episodic activists, where we just go from episode to episode — George Floyd to Breonna Taylor, and never deal with the underlying fact that we are being choked every day economically,” he said. “There is a knee on our neck every day, we are either the workers or the unemployed, while others take billions of dollars from our communities with no commitment at all.” 

The city has secured $2 million so far from AT&T, Shaquille O’Neal, Panasonic, Carlos Medina, Nelson Mullins Law Firm, and New Jersey Community Capital, PSEG and Popular Bank. Newark and its co-partners in Invest Newark and New Jersey Community Capital have set a goal to raise $10 million by the end of the year. 

Isabelle Livingston, owner of Closet Savvy Consignment on Maiden Lane, told TAPinto Newark in May that she received nothing from the PPP. Others, particularly Black-owned businesses, echoed her experience and lamented the banking and records requirements required for the applications, which many small proprietors don’t have. 

“It was really disheartening, with the PPP especially, just to see that much like everything else in life, size matters. I really would hate to close, because my story really resonates with so many people here in this city,” Livingston said. “I grew up here, my mother was on social services, living in housing projects with very little education, and I was able to get this establishment in downtown Newark that served as a beacon of hope for people who look like me.”

T. Strong, owner of Dirty Soles Footwear Group and a newly launched footwear incubator, Studio Sole, was able to access loans but said Tuesday that COVID-19 amplified disparities for other entrepreneurs in her community. 

“One of the things we became even more aware of during this pandemic is that access to capital for people who look like us is often limited for a multitude of historically systemic reasons,” she said. “But with access to capital through this fund, we hope our community will be able to build toward our goals for the future of our businesses”.

What’s more, a study from the National Community Reinvestment Coalition showed that lending discrimination played a role in the distribution of PPP funds, as lenders historically have with applicants of color. Researchers matched pairs of Black and white applicants with similar credit characteristics to apply to the program, finding that 27 out of 63 white applications received better treatment and results from lenders. 

Mayor Ras Baraka said the FAM Fund will economically uplift Black and Latinx business owners and bolster generational wealth. Other programs created under his administration, like the creation of pathways for minority real estate developers, have mirrored a goal to include local residents in Newark’s rapid redevelopment. 

“We need the anchor institutions and corporate institutions in the city that make billions in Newark’s footprint and along its coordinators to contribute to the wealth and success of the majority of its residents. And we need it now. ” Baraka said. “Now more studies, no more small talk, no more moral support, no more white papers, no more feasibility studies.”

Starting in 30 to 60 days, entrepreneurs will be able to access an electronic application through the InvestNewark.org and NewJerseyCommunityCapital.org, according to Invest Newark CEO and President Bernel Hall. 

Wayne Meyer, President of New Jersey Community Capital, said that businesses may also request services like technical assistance and business support from the Invest Newark team. 

Baraka emphasized that the fund was not merely a lifeline for those who are already residents of the majority-minority city, but an invitation to join the party. 

“We’re inviting people to the city of Newark. We’re trying to inform Black and brown businesses that there is a place for them to land,” he said. 

Those interested in learning more about or donating to the NWK FAM Fund can contact BHall@investnewark.org.

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published this page in News and Politics 2020-09-29 03:23:53 -0700