Less than two months ago, the Starbucks CEO Howard Schultz decided to forgo all political contributions. Now, The Starbucks Foundation is donating $5 million to get a small-business fund up and running.
Starbucks asks for $5
In addition to the $5 million the Starbucks Foundation has donated, Starbucks stores will be taking donations for the Opportunity Finance Network. Donations in-store of $5 or more are returned with a red, white and blue wristband. According to the OFN, each $5 donated can be leveraged to create $35 worth of financing to help small businesses start up, expand, hire more employees or extend credit. Starbucks is providing the finances to keep the fund up and running.
The Opportunity Finance Network
The Opportunity Finance Network is an association of financial institutions, banks, credit unions, venture capital funds and loan funds. The network offers financing and loans to communities that do not traditionally have access to credit or business financing. The funding is intended to help start up businesses or help existing business hire more. In the 27 years since the Opportunity Finance Network has started up, the association has invested $23.2 billion.
What it takes to create a job
What, exactly, is required to “create a job” has been a matter of some debate among lawmakers and business advocates. Short of directly hiring people, the government can only take so much action to encourage businesses to hire. Getting small businesses to hire is a multi-faceted problem that encompasses business security, income security, and confidence about the economy. Generally, however, more open access to credit and business support are two essential elements in encouraging businesses to hire. The Opportunity Finance Network uses the funds it has available to underwrite loans to small businesses. About 98 percent of all OFN loans are paid back in full, a statistic that is difficult to match with any other lending method.
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