Truist Foundation knew it needed to get capital into communities hit the hardest by COVID-19, so it approached NC Rural Center with a new idea.
SOURCE: Truist
DESCRIPTION:
Truist Foundation invests in rural communities.
The COVID-19 pandemic left many small businesses in a state of disarray. Suddenly, business owners were experiencing cash flow shortages, decreased revenue, and waves of the pandemic hitting the country. The cycle seemed to never end.
For minority-owned businesses, the pandemic pains compounded on top of existing social and economic barriers, increasing the need to find relief.
With a mission to support minority and women-owned small businesses, Truist Foundation began efforts to get capital flowing into those communities.
Early in the pandemic, the Foundation began working with NC Rural Center, a nonprofit organization aiming to improve the quality of life for North Carolina’s rural people and places. Truist and NC Rural Center created a fund for Community Development Financial Institutions (CDFIs) that would provide them with the capital they need to make transformative loans to racially and ethnically diverse small-business owners, women, and individuals in low- and moderate-income communities.
“In the early spring of 2020, we started a conversation with the Truist team about their Community Benefit Plan,” said Barry Ryan, NC Rural Center Senior Vice President of Strategy & Small Business Capital. “As the conversation evolved, it became imperative to think bigger about this work—supporting businesses led by women and people of color—and we are lucky that the conversation grew into a shared commitment to make that bigger vision a reality.”
Truist awarded NC Rural Center a $40 million* grant to launch CornerSquare Community Capital. This long-term solution would support CDFIs working with small businesses at the local level.
“In our current environment, we wanted to create a program that wasn’t a short-term fix, but a long-term strategy to help CDFIs to become more sustainable,” said Lynette Bell, President at Truist Foundation. “Allocating capital to CDFIs through CornerSquare will allow us to meet critical community needs and support underserved populations and racially diverse small businesses, which is vital in our current environment.”
How do CDFIs help?
CDFIs are nonprofit loan funds that distribute capital to those who might not be able to receive a loan from a bank because of a lower credit score or lack of the proper paperwork. CDFIs are designed to take on risk and support those in lower-income communities—which means underserved communities experience economic growth and greater access to job opportunities.
Since CDFIs distribute smaller loans with greater levels of risk, obtaining capital can be a challenge.
“CDFIs struggle to acquire capital, which poses a challenge because the more capital they have, the more lending they can do,” said Todd Brantley, Vice President of Public Affairs at NC Rural Center. “Truist sought to address that exact challenge by creating a program that would allow CDFIs to leverage their capital and expand impact.”
The impact grows.
By creating CornerSquare, NC Rural Center has been able to expand its work and address the need in low- and moderate-income communities outside of North Carolina.
“Through the Truist Foundation, we began growing our presence in the 17 states within the Truist footprint,” said Armeer Kenchen, Executive Director of the Small Business Credit Initiative and CornerSquare Community Capital. “Having the support of a foundation that’s known and trusted eliminated a major barrier for us, and we were able to expand and increase our impact.”
A prime example of those helped is Jill Hendrick, a business owner in Pineville, West Virginia. In a town transforming from coal to tourism, Hendrick realized all-terrain vehicle (ATV) trails in Pineville were bringing in thousands of visitors. She saw an opportunity to rent overnight accommodations to trail riders.
To seize this opportunity, she set out to buy a set of 18 condominium units.
“If you’re going to be successfully renting to the trail riders, you need to have parking and lodging,” said Hendrick. “Having condominiums will make a property more appealing to riders.”
CornerSquare partnered with a CDFI called Nature Capital Investment Fund (NCIFund) to finance the acquisition and distribute the capital for Jill’s loan.
“I knew Jill’s experience in the lodging industry and knowledge of the area would make her successful,” said Justin White, Loan Officer at NCIFund. “It was inspiring to work with an entrepreneurial woman. She’s proving to be a great example of how we’re helping to build a new, entrepreneurial economy, one small business at a time.”
The money from the loan has directly helped the Pineville community continue its transition into a tourism economy and revive its economic base.
“This project would not have happened without Truist Foundation’s willingness, foresight and innovation,” said Kenchen. “With the help of Truist Foundation, Pineville is a place that’s coming back to life.”
Jill’s business is growing and thriving as she continues to welcome in visitors looking to explore the town’s ATV trails.
“The trails have transformed the town. While so many rural places in West Virginia are losing population, Pineville has people coming and staying,” said Hendrick. “So, when you hear the trail riders coming into town in the morning, it’s just this beautiful roar. It’s the sound of our economy coming back to life.”
As CornerSquare distributes capital throughout communities, Truist will continue to provide support and guidance. From marketing to communications to underwriting to strategy, Truist is helping CornerSquare make a lasting impact.
“I want to help bring life into these communities,” Kenchen said. “I want people to be able to look out the window and see that they've got investment, resources, and access to capital. That’s why we do this.”
Truist Foundation aims to build career pathways to economic mobility, which is why we’re proud to support organizations that provide employment opportunities for low-income individuals. Click here for more stories about the work we’re doing.
* Truist's $40 million donation to help establish CornerSquare represents funding from both the Truist Foundation Inc. and the Truist Charitable Fund.
About Truist Foundation
The Truist Foundation is committed to Truist Financial Corporation’s (NYSE: TFC) purpose to inspire and build better lives and communities. Established in 2020, the foundation makes strategic investments in nonprofit organizations to help ensure the communities it serves have more opportunities for a better quality of life. The Truist Foundation’s grants and activities focus on leadership development, economic mobility, thriving communities and educational equity. Learn more at Truist.com/Purpose/Truist-Foundation.
KEYWORDS: NYSE:TFC, Truist Foundation, NC Rural Center, Community Development Financial Institutions
