Starbucks is giving more than $5 million for small business loans. Here's how to get your own "Latte Loan."
Donation jars recently started appearing at Starbucks coffee shops. No, not for a Christmas charity, but rather for funding entrepreneurship. Starbucks is using the donations, and $5 million of its own capital, for a small business loan program called "Create Jobs for USA".
The goal? Along with doling out $5 cups of coffee, Starbucks will now fund loans of $50,000 and more for small businesses in the United States. The company has a history of supporting "micro-finance" efforts in developing countries, but this is its first attempt to put money to work here at home.
Of course, your local coffee shop won't be handing out checks. The Opportunity Finance Network (OFN) will administer the money through a network of 180 local lenders called Community Development Financial Institutions (CDFI).
So if you want a Latte Loan for yourself, start by finding the OFN-CDFI nearest you. Be sure you know how you'll use the money to hire new workers: Each lender has its own criteria, but the Starbucks money is earmarked only for loans that create jobs at small businesses.
Starbucks is putting up $5 million from its foundation. And donation cups at local Starbucks' locations are collecting much more from the general public. For your donation of $5, you'll get the satisfaction of helping a small business -- and get a spiffy red-white-and-blue "INDIVISIBLE" wristband.
Whether you love Starbucks or hate 'em, check out OFN anyway. Their network of lenders is a potential lifeline in this "bankless" economy.
The program has already prompted critics to call foul, but its hard (for me) to find fault with a seven-figure grant to a group as robust as the Opportunity Finance Network. Starbucks itself will have no authority over how the money gets spent, the OFN will monitor and audit the number of jobs created, and the local CDFI will leverage the investment -- allowing them to loan out 7 times as much as Starbucks donates.
Lots of reasonable people agree that this is a well-thought out program and the company is getting a lot of well-deserved PR.
I tip my coffee mug to Howard Schultz and Starbucks. Hope you will tip your barista... and make a donation to the cause -- or at least have another cuppa joe and apply for a loan... then go out and create some new jobs!
Dedicated to your (caffeinated) profits,
PS: I know at least 27 other great ways you can finance your business. Find out more at my award-winning small business finance website, and learn how I can be your part-time CFO.