FOR IMMEDIATE RELEASE February 21, 2012
Contribution Will Help LEDC Increase Flow of Much-Needed Capital to Low- to Moderate-Income DC Business Owners by 50 percent
Washington, DC – Today, Citi Community Development and the Latino Economic Development Corporation (LEDC) announced a substantial contribution to help small businesses in the district access microloans to support business expansion, income growth, and job creation. LEDC’s successful micro-lending program provides alternative financing to small businesses, the most important engines of economic growth in the District. Citi’s $500,000 commitment will enable LEDC to expand its micro-lending program and increase lending to small businesses by nearly 50 percent over the next year.
More than 58,000 small businesses operate within the District of Columbia. While nearly three-quarters of these businesses employ fewer than 20 workers, small businesses as a whole represent more than 90 percent of all employers and employ almost half of the private-sector workforce in the District—more than 217,000 workers. More importantly, these businesses have been responsible for creating 95 percent of all new private-sector jobs in the District since 2005. Small businesses require ready access to financing; in recent years, however, business owners have found it increasingly difficult to access the capital they need to hire workers, purchase inventory, and expand their enterprises. With the unemployment rate in Washington, DC at 10.4 percent (compared to 8.3 percent nationally) and 34,800 District residents seeking jobs but unable to find them, LEDC’s microlending program provides much-needed capital and other resources to small businesses, the most important drivers of growth in the region.
“We are greatly appreciative to private companies like Citi and nonprofit partners such as the LEDC for their work with local small businesses,” said District Deputy Mayor for Planning and Economic Development Victor L. Hoskins. “This City cannot achieve its goals of increased opportunities for entrepreneurs and job-seekers with public-only initiatives and are pleased that our local small business owners now have enhanced opportunities to access capital because of Citi’s investment.”
As a certified Community Development Financial Institution, LEDC’s Microloan Program provides loans between $5,000 and $50,000 to start-ups and existing businesses that have difficulty obtaining credit from mainstream financial institutions. Since 1997, LEDC’s Microloan Program has provided more than $4 million dollars in start-up capital to ventures that may not have access to commercial bank loans, venture capitalists, and other sources of formal financing. As the economic slowdown persists and more people turn to self-employment as a primary way to support themselves, LEDC has seen a marked increase in the demand for its small business development and microlending services.
“Citi’s generous contribution is the largest single private gift in LEDC’s 20-year history and demonstrates how the private sector and community-based nonprofits can work together to strengthen support for aspiring entrepreneurs,” said LEDC Executive Director Manny Hidalgo.
In 2011, LEDC disbursed 81 small business loans that injected nearly $700,000 of capital into the local economy, including 30 loans in the District. With an average loan size of $10,000, Citi’s contribution will enable LEDC to make approximately 40 loans in the District in 2012. LEDC will leverage these funds to seek additional support in pursuing its goal of tripling the amount it will loan to small businesses in the Washington region in five years to approximately $2.16 million, including $650,000 for DC small businesses.
“Small businesses provide the greatest opportunity for job creation and they are vitally important to the stability and growth of a community and a local economy,” said Bob Annibale, Citi Global Director of Community Development and Microfinance. “Citi is committed to working with leading community partners, such as LEDC, and local officials to provide the resources to support small businesses, strengthen neighborhoods, and create stable jobs.”
Citi’s support for LEDC is the latest and largest in a long record of local investment in the greater Washington, DC area. In 2011 alone, Citi and the Citi Foundation together committed more than $700,000 to support programs and partners involved in neighborhood revitalization, small business development, financial capability-building, and other initiatives.
This latest investment in LEDC will assist small business owners like Erin White and Fredy Robles, owners of Mindy’s Catering, a local family-owned full-service catering business that has operated in the District for over 20 years.
“With the financial support of LEDC and Citi, we are going to be able to make renovations to our catering business, improve our marketing, and entrepreneurs like us are going to be able to strengthen their businesses and create jobs in the District,” said Fredy Robles.
In addition to making capital available, LEDC works with business owners to improve their consumer credit score, assess the financial health of their businesses, and connect to the financial tools needed to develop their business.
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About Citi Community Development Citi Community Development (CCD) is leading Citi’s commitment to achieve economic empowerment and growth for underserved individuals, families and communities by expanding access to financial products and services, and building sustainable business solutions and innovative partnerships. Our focus areas include: commercial and philanthropic funding; innovative financial products and services; and collaborations with institutions that expand access to financial products and services for low-income and underserved communities. For more information, please visit www.citicommunitydevelopment.com.
About LEDC Working families deserve to live in affordable homes and own successful small businesses – but too many are unable to turn these dreams into a reality. The Latino Economic Development Corporation (LEDC) equips Latinos and other DC-area residents with the skills and financial tools to create a better future for their families and communities. Participants in our programs learn how to buy and stay in their homes, take control of the decisions affecting their apartments building, and start or expand small businesses. For more information, please visit www.ledcmetro.org.