Building on a successful pilot program that brought support to some of the nation’s most distressed neighborhoods, Morgan Stanley, along with the Local Initiatives Support Corporation (LISC) and CDC Small Business Finance, announced a $25 million Clinton Global Initiative (CGI) Commitment to Action for an expansion of the Job Creation and Community Revitalization Fund.
This CGI Commitment to Action more than doubles the impact of the 2012 pilot program, allowing the program to expand to more communities and provide additional opportunities for small businesses in underserved markets across the country to access capital through year-end 2015. First launched by Morgan Stanley and LISC in 2012, the initial $10 million fund has been invested in a range of companies, from a dental practice in Milwaukee and a construction firm in Phoenix to a neighborhood café in Indianapolis – all of which have added jobs in economically distressed areas as a result.
“Our expansion of the Job Creation and Community Revitalization Fund epitomizes Morgan Stanley’s commitment to sustainable investing, demonstrating the business case for seeking both financial returns and social impact,” said Audrey Choi, Managing Director and Head of Global Sustainable Finance and CEO of the Institute for Sustainable Investing at Morgan Stanley. “Small businesses are critical to the well-being of communities, especially those struggling through economic challenges. With the success we had in 2012, we are optimistic that another wave of small businesses will take off and grow with the new capital this innovative fund provides.”
This fund is the first of its kind to combine the benefits of the Small Business Administration (SBA) 504 program with New Markets Tax Credits (NMTCs). The innovative fund structure allows for investments that are smaller than those associated with typical NMTCs, making the capital more flexible and responsive to the needs of small businesses in distressed areas of the U.S. This program allows small businesses to access affordable capital that otherwise would not be available to build and grow businesses – and consequently is expected to create more than 150 new jobs, according to SBA projections. In addition, most of the investments through the Fund are part of broader efforts to revive struggling commercial areas and improve the overall quality of life in disadvantaged communities.
“The market for small business loans continues to be very tough, especially when considering the difficulty of trying to start or build a business in areas marked by high crime, high unemployment and long-standing poverty,” noted Kevin Boes, president of LISC’s New Markets Support Company, which manages the fund. “This program is important to helping revive the commercial prospects of low-income areas and, in the process, transform them into good places to live and work.”
For more information about loan terms, visit www.newmarkets.org.
LISC combines corporate, government and philanthropic resources to help nonprofit community development corporations revitalize distressed neighborhoods. Since 1980, LISC has raised $13.8 billion to build or rehab 310,000 affordable homes and develop 46 million square feet of retail, community and educational space nationwide. Toward that end, the Treasury Department has awarded LISC $840 million in New Markets Tax Credit investment authority, one of the largest allocations in the country. All told, LISC support has leveraged nearly $51 billion in total development activity. For more information, visit www.lisc.org.
About Morgan Stanley
As one of the leading global financial services firms providing a wide range of investment banking, securities, investment management and wealth management services, Morgan Stanley (NYSE: MS) is committed to mobilizing the power of the capital markets to achieve sustainability – for clients, communities and stakeholders. Morgan Stanley’s Institute for Sustainable Investing, launched in November 2013, aims to mobilize capital to address pressing global challenges. The Institute centers its work on the belief that private sector capital can play a key role in driving large-scale solutions for the most critical challenges to widespread prosperity and well-being. Since 2006, Morgan Stanley has committed more than $9.6 billion in investments to strengthen underserved communities. For more information about the Morgan Stanley Institute for Sustainable Investing, visit www.morganstanley.com/sustainableinvesting. For more information about Morgan Stanley, please visit www.morganstanley.com. Morgan Stanley & Co. LLC and Morgan Stanley Smith Barney LLC, Members SIPC.
About the Clinton Global Initiative (CGI)
Established in 2005 by President Bill Clinton, the Clinton Global Initiative (CGI), an initiative of the Clinton Foundation, convenes global leaders to create and implement solutions to the world’s most pressing challenges. CGI Annual Meetings have brought together more than 180 heads of state, 20 Nobel Prize laureates, and hundreds of leading CEOs, heads of foundations and NGOs, major philanthropists, and members of the media. To date members of the CGI community have made more than 2,900 commitments, which are already improving the lives of more than 430 million people in over 180 countries.
CGI also convenes CGI America, a meeting focused on collaborative solutions to economic recovery in the United States, and CGI University (CGI U), which brings together undergraduate and graduate students to address pressing challenges in their community or around the world. For more information, visit clintonglobalinitiative.org and follow us on Twitter @ClintonGlobal and Facebook.
LISC, Colleen Mulcahy, 312-342-8244
Morgan Stanley, Wesley McDade, 212-761-2430
CRC 1020025 09/2014