Bank of America Corp. pledged an additional $50 million for women-owned businesses backed by fashion designer Tory Burch’s foundation, doubling its commitment from five years ago.
The bank plans to fund community development financial institutions, or CDFIs, that can lend to female entrepreneurs who might not qualify for traditional credit, said Andrew Plepler, global head of environmental, social and governance initiatives. In the past five years, more than 2,500 women have received $46 million in small-business loans from participating CDFIs, he said. Those loans were for an average of $16,000 over three to five years, at typical interest rates of about 8 percent to 10 percent.
“Women are a great investment,” Burch said in an emailed response to questions. “They pay back their loans faster than men, and the CDFIs we work with report a repayment rate of over 90 percent. If an entrepreneur receives a loan through our capital program, it will help her access capital later.”
The ultimate goal of the program is “to build a pipeline of women-entrepreneur businesses that can grow and expand and ultimately get larger sums of capital from financial institutions,” Plepler said.
In November, the Charlotte, North Carolina-based bank also started an online course with Cornell University aimed at female entrepreneurs.
“We are very focused on empowering women,’’ said Sharon Miller, head of small business at Bank of America.
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