Entrepreneurs of color face unique challenges — especially now — but the company has innovative ways to help ensure their success.
By Kara Corridan
Editor’s Note: To mark National Small Business Week, we’re updating and reposting this story from February, which highlights Prudential’s work supporting small businesses. Since that time, through the Entrepreneurs of Color Fund, Prudential has helped facilitate more than $100,000 in loans to entrepreneurs in Newark, New Jersey, with another $1.5 million currently in process. Prudential also waived rent for its retail tenants in Newark through April, totaling 25 months of rent relief — critical to owners who saw a massive drop in foot traffic during the pandemic. In fact, according to data from the city, Newark businesses are estimated to have lost $60 million to $100 million in consumer spending due to the pandemic. To help offset this loss in spending, Prudential is supporting the Newark Gift Card program, which allows consumers to purchase gift cards to be used at more than 100 participating merchants. The company has contributed $50,000 in incentive and bonus funds to the program to help ensure its success.
Prudential has a longstanding and wide-ranging focus on supporting small businesses, especially those owned by women and people of color. It has provided $13.8 million in grants, and, in 2021 alone, the company approved more than $3.9 million in grants to support small businesses nationally, including more than $2.8 million dedicated to its headquarters city of Newark, New Jersey.
Beyond providing access to capital, support comes in the form of coaching and fostering connections to other resources for businesses. Prudential focuses on standalone businesses that are a vital part of their communities, small businesses with potential to scale, high-potential entrepreneurs, and businesses wishing to transfer ownership to its employees, explains Sarah Keh, vice president, Social Responsibility and Partnerships, Inclusive Solutions. (Learn more about this last model, known as employee ownership, in “From small-business employees to small-business owners,” below.)
A crisis among small businesses
There are more than 4 million minority-owned small businesses in the U.S., with annual sales close to $700 billion. They are critical to boosting a community’s economic development and closing the wealth gap. But they face systemic barriers: Owners often don’t have access to capital that their white counterparts do, and even when white and Black owners have similar good credit, Black-owned businesses are half as likely to receive financing, according to a report from the Federal Reserve System.
When the pandemic hit, small businesses, particularly those owned by women and people of color, were drastically impacted. Minority-owned businesses received loans through the Paycheck Protection Program at a far lower rate than white-owned businesses. Newark businesses are estimated to have lost $60 million to $100 million in consumer spending due to the pandemic.
Prudential’s financial support provided more than 50,000 hours of technical assistance that enabled 3,638 Newark small businesses and entrepreneurs to gain access to capital, market and business information, and the resources to ensure long-term sustainability.
Support from all corners of Prudential
The company just announced its latest initiative to support small businesses. Prudential, JPMorgan Chase and The Rockefeller Foundation have committed a total of $1.7 million to bring the Entrepreneurs of Color Fund to Newark. The company just announced its latest initiative to support small businesses. Originally launched in Detroit before branching out to Chicago, Washington, D.C., and other areas, this program provides diverse small-business owners and entrepreneurs with access to lending opportunities, expertise and support needed to grow. (See “The Entrepreneurs of Color Fund: A first for Newark” for more details.) This is in addition to Prudential’s $300,000 grant, deployed earlier this month, to New Jersey Community Capital to fund small businesses impacted by the lasting effects of the pandemic and provide technical assistance to help them expand. These are just two recent examples of the many ways Prudential helps knock down the most persistent barriers for small-business owners. And while much of this work is driven by Inclusive Solutions, the division of Prudential focused on diversity, equity and inclusion, it comes from all corners of the company.
- PGIM Real Estate’s Impact & Responsible Investing team has deployed approximately $132 million in small-business capital to community development financial institutions since 1974.
- Global Sourcing and Procurement has a robust program to ensure Prudential works with diverse suppliers, which include small businesses.
- Starting in March 2020, Corporate Real Estate provided invaluable support to tenants in Prudential-owned buildings in Newark — most of which are small businesses, many owned by minorities — by waiving their rent through February 2022. (Whether rent relief will continue is still being evaluated.)
- Marketing has recently launched two unique partnerships: Through the first-of-its-kind Buy Black program, Prudential is lending brand placement exposure on the New Jersey Devils’ helmets to Razu, a Black-owned digital platform for musicians. This New Jersey-based business will receive marketing and business consultation, financial wellness counseling with a Prudential financial advisor, and networking opportunities. Prudential has also partnered with iHeartMedia Atlanta and Operation HOPE to support its One Million Black Businesses Initiative, which aims to create a million new Black-owned businesses by 2030. The company has homed in on efforts to help Black entrepreneurs in Atlanta successfully start and grow their businesses.
Employees can — and do — make a difference
Employees play a big role in this work, too. Take the PruBono Small Business program: In 2021, employees provided 1,927 hours’ worth of expertise to Newark and Atlanta small businesses — the value of which was estimated at more than $427,000.
Through PruCARES, Prudential’s employee community service and charitable giving platform, employees can also volunteer to advise Black, Latinx and Indigenous entrepreneurs who need assistance from those with a variety of expertise, including marketing, product design, financial projections, project management and more.
The Entrepreneurs of Color Fund: A First for Newark
From small-business employees to small-business owners
Kristyn Klei Borrero, center, with the CT3 team
Nearly five years ago, Kristyn Klei Borrero, co-founder of CT3, which offers professional development and teacher training for those who work with students in underserved communities, started to plan her exit strategy to ensure innovation continued at CT3 and wouldn’t be stunted by the tenure of her leadership. She also understood that her employees — nearly 80% of whom are people of color — don’t necessarily have the same access to wealth building opportunities as she does. So on her 45th birthday, she announced that when she turned 50, she would hand her company over to her employees. She is now in the process of launching an employee stock ownership plan, a concept growing in popularity in which workers become owners through stock shares. These plans are considered a critical way to increase wealth among employees of color.
Borrero, who is white, describes this as her way of standing as an ally for her employees and demonstrate her solidarity in the anti-racism movement. “Most of the folks at CT3 have been undergraduate and grad students, and many of them have doctorates,” she says. “So they have a level of privilege, but maybe not the same access as white folks. The employee succession plan is about opening up a different level of access.”
She’s doing this with the help of Project Equity, an organization supported by Prudential that’s a national leader in the employee ownership movement. “I love that Project Equity was started by women and has worked with many companies with people of color,” she says. “Philosophically we are very aligned. And it has a solid education process”—critical for her team, many of whom are growing into a business-owner mindset.
Borrero is on track to have her employee succession plan in place by her 50th birthday in October. And as life-changing as this decision is, it wasn’t a hard one to make: “It just feels like the right thing to do.”