Mayor Cantrell, NewCorp, Inc., New Orleans Business Alliance and Partners Unveil $5 Million BuildNOLA Mobilization Fund
On March 10, 2019, Mayor LaToya Cantrell, NewCorp, Inc., and the New Orleans Business Alliance joined business and philanthropic partners to announce a new $5 million Mobilization Fund that will provide critical access to capital for entrepreneurs of color and women to participate in public infrastructure projects, create more jobs and grow our local economy.
NewCorp, a local Community Development Financial Institution, will manage the Fund. NewCorp has a long record of accomplishments supporting entrepreneurs through increasing available credit, investment capital and financial services. Specifically, through the Fund, NewCorp will review applications, provide technical assistance, grant credit lines, and ensure loan repayment. The City of New Orleans acts as a conduit for many applicants to the Fund, often identified through the City’s BuildNOLA small business technical assistance program.
BuildNOLA Mobilization Fund: a Big Win for New Orleanians
“The BuildNOLA Mobilization Fund is a big win for the people of New Orleans, and for businesses owned by entrepreneurs of color and women — who will get needed access to capital that enables them to perform on public contracts,” said Mayor LaToya Cantrell. “This is what it looks like when we stand together with our business community to move this City forward. We’re creating jobs, we’re investing in our people, and we’re making it possible for small businesses to get their fair share.”
“Access to capital and opportunity is a major barrier to economic competitiveness amongst small contractor businesses in general and in particular to businesses owned by people of color. The Mobilization Fund not only seeks to remove this barrier, but more importantly to provide the efficacy of alternative strategies and sources of capital to serve under-served communities and businesses that are forced to operate outside of the mainstream capital market place. If we, the primes, the financier, and the small disadvantaged businesses get this right, it will change the trajectory of small contractors and enhance the earnings and expertise of the primes,” said Vaughn Fauria, president & CEO, NewCorp, Inc.
As the city’s official economic development agency, the New Orleans Business Alliance is charged by Mayor Cantrell with growing the small business ecosystem in New Orleans. Since 2018, the Business Alliance worked with philanthropic leaders to secure the $5 million of funding for this important initiative.
Improved Infrastructure Means Jobs and Business Opportunities
“A growing city is a city of thriving entrepreneurial businesses. For businesses, access to capital is like oxygen, providing life to revenue growth and increased hiring,” said Quentin L. Messer, Jr., president & CEO of the New Orleans Business Alliance. “A company that scales up can do more work, win larger projects and contracts, and ultimately share its successes with more of our friends and neighbors. As Mayor Cantrell stresses, we must be a City of Yes and there is no more important area where more Yes answers are needed than in the area of growth capital. Today is an important step and we applaud the City of New Orleans and NewCorp and are grateful for our financial investors within the Fund.”
Over the next four years, over $2 billion will be spent on streets and subsurface drainage and approximately $250 million will be spent on green infrastructure projects by the City of New Orleans. As the Request for Proposals (RFPs) for these projects come out, it is important to ensure that especially businesses owned by people of color and women have better access to these contracts. The BuildNOLA Mobilization Fund opens the door for entrepreneurs of color and women to compete for these city projects. More successful contract awards add scale and capacity for local small businesses.
A Coalition of Funders
The New Orleans Business Alliance worked to attract various funders – financial institutions, foundations, and city government – to raise $5 million and form the BuildNOLA Fund. Liberty Bank and Kresge Foundation acting as the main investors. The City of New Orleans contributed $250,000 for the fund’s loan loss reserve, reducing the risk for these funders. JPMorgan Chase Foundation provided a $225,000 grant for operating support. Finally, the Greater New Orleans Foundation and the Foundation for Louisiana provided funds for technical assistance services to loan applicants and recipients that will be taking on green infrastructure projects.
“This fund will strengthen disadvantaged businesses’ ability to bid and execute on a pipeline of public contracts and access roles as prime contractors. We support it because we believe, over time, it will build wealth among New Orleans-based businesses and the New Orleanians they employ,” said Rip Rapson, president & CEO of The Kresge Foundation. “Inclusive growth in cities such as New Orleans depends on ensuring business and job opportunities benefit residents with lower incomes.”
“Small businesses are powerful engines of economic opportunity. When we lift up small business, we create greater prosperity, job creation and economic stability for New Orleanians,” said Shearita Despenza, executive director at JPMorgan Chase. “JPMorgan Chase is proud to support NewCorp in deploying this Mobilization Fund, which will give women and minority-owned businesses the capital they need to fully participate in New Orleans’ growing economy.”
Liberty Bank to Administer Loans
In 1972, Liberty Bank was chartered in New Orleans with a focus on service, integrity and a sincere interest in community and business development. Now with branches in over eight states, Liberty Bank prides itself on investing into the local economy from which it came. The loans administered by Liberty Bank will allow DBEs, who have historically had limited access to City contracts due to multiple barriers, including lack of access to financing, a resource to grow their access to City of New Orleans projects.
“Access to capital continues to be the most important factor limiting the establishment, expansion and growth opportunities for firms. This creates a disadvantage because it results in a lack of access to economic opportunities in contracting in New Orleans,” says Alden J. McDonald, president & CEO of Liberty Bank and Trust Co. “These businesses continue to be an engine of employment and economic development and we are proud to be able to provide a means to sustain them within our communities.”
“Liberty Bank is keenly aware of the need to provide capital to small businesses enterprises,” says Drextel Amy, president of Liberty’s Michigan Region. “There are many small business enterprises that have the expertise to perform high quality work that don’t have consistent access to capital to fuel their basic operations and growth. Providing capital to these entrepreneurs effectively allows them to gain access to public and private sector contracting opportunities.”
BuildNOLA Mobilization Fund Builds Off Previous Success
This new $5 million mobilization fund builds off a 2016 loan fund piloted as a result of a $1.5 million investment from Living Cities with the goal of increasing access of entrepreneurs of color and women to City of New Orleans projects. The evaluation of the pilot revealed that the fund enhanced recipients’ ability to deliver on their public contract by reducing immediate financial barriers and allowing the contractors to focus on providing high-quality services, as opposed to focusing on how to manage their contract with receivables only. Based upon this successful experience, local philanthropic leaders through the Greater New Orleans Funders Network Coastal Action Table worked with the New Orleans Business Alliance to raise the money for the Fund.
“The expanded mobilization fund builds off of a $1.3 million loan pool that was originally funded by Living Cities. We are delighted to see that more small and growing businesses will have access to capital in the future.” Norris Williams, associate, Capital & Public Sector Innovation at Living Cities.
“Our Foundation is committed to providing strong civic leadership to help address challenges facing our region,” said Andy Kopplin, president & CEO of the Greater New Orleans Foundation. “As the leading community foundation in our region, we are proud to invest and help work with our partners in philanthropy, business, and the government to deliver this mobilization fund. We are especially proud that this fund will enhance our foundation’s work with the Cantrell Administration to improve our green infrastructure while providing meaningful workforce opportunities.”
“At FFL we believe that Louisianans should have the freedom to dream and be financially secure. We are honored to invest in the BuildNOLA Mobilization Fund in support of opportunities that allow our people to work and thrive particularly in our local water management economy,” Flozell Daniels, Jr, president & CEO of Foundation for Louisiana.
Interested Small Businesses Should Contact NewCorp
Businesses interested in the BuildNOLA Mobilization Fund should contact Peter Brooks at NewCorp, Inc. by calling (504) 208-1700 or emailing email@example.com.