US investment firm Goldman Sachs announced today that it would deliver $300 million across two separate initiatives to help small businesses and communities around the world navigate the current health and economic crisis caused by the outbreak of COVID-19.
The company committed $275 million to create a small business stimulus package, including $250 million to provide emergency loans to small businesses across the country and $25 million in grants to Community Development Financial Institutions (CDFIs) and other mission-driven lenders to ensure they have the necessary capacity to underwrite and deliver loans to small businesses as soon as possible.
Additionally, it committed $25 million as part of the Goldman Sachs COVID-19 Relief Fund to support communities in most urgent need globally, with the firm contributing to match employee donations up to an additional $5 million.
“COVID-19 has created an extraordinary global health and economic crisis and the urgency and scope of our actions must reflect this reality,” according to David M. Solomon, Chairman and Chief Executive Officer at Goldman Sachs. “We are deploying our capital and expertise to help small businesses navigate the incredible burdens they face, while ensuring that health providers and relief organizations have the funds they need to fulfil their missions,” he continued.
“We have worked hand-in-hand with entrepreneurs to support the growth of their businesses for over a decade, recognizing that they are foundational to our economy. These businesses are relied upon by a constituency far broader than their customers and clients, and we are taking immediate steps so that they may continue to support their employees, their families, and their communities. Our hope is that with immediate cash loans and the necessary stimulus to lending institutions, we can help provide the time these businesses need to weather this crisis,” Solomon added.
Emergency Loans
Building on Goldman Sachs’ decade of supporting small businesses through 10,000 Women and 10,000 Small Businesses, the small business stimulus package will provide emergency loans to small businesses, which employ nearly half of the American workforce and serve a critical role in the economy, the firm said in its statement.
According to a recent 10,000 Small Businesses survey, 96% of respondents said they had been impacted by COVID-19, 70% said loans at reduced interest rates would help their business, and 51% said their business would only be able to continue to operate for up to three months.
“Goldman Sachs has committed $250 million in capital to fund low-interest loans to ensure these small businesses have the resources they need to fund their operations, weather the current crisis and meet their commitments to their landlords, suppliers, and employees,” the company’s statement said.
The Small Business Stimulus Package has already allocated funds in conjunction with two public-private partnerships with the cities of New York and Chicago, together with several corporate and non-profit partners, the firm explains.
COVID-19 Relief Fund
Goldman Sachs is also donating $25 million to a relief fund the firm set up internally. The fund will provide assistance to front-line healthcare providers, medical research, and economic relief to those who have lost work or childcare resources due to the health crisis.
