NEW YORK – Eleni Delimpaltadaki Janis, Greece native and co-founder of the investment firm Equivico, expressed her belief that the economy “cannot evolve and grow unless basic social and economic issues are resolved.” She spoke with The National Herald noting the priority of combining smart investment with social justice.
Delimpaltadaki, who during her career in New York has served as a senior executive in investment services and public benefit organizations that had the alleviation of financial inequalities at the top of the agenda, co-founded Equivico with the National Community Reinvestment Coalition (NCRC), and also serves as Managing Partner and Chief Investment Officer. The main goal is to provide access for lending interests to small and medium-sized enterprises, for which the “well” of large banks has been closed, resulting in financial deadlocks, inability to grow, and an ineffective long-term survival rate.
"Our goal is to support small businesses, both with capital and training programs. We will work with such companies in the U.S. We have to offer capital and the biggest part of that is lending. The loans we offer are at a low interest rate and include the concept of social responsibility. The reason we do this – and here comes the concept of social responsibility – is that these small businesses cannot get loans. In essence, banks have stopped lending to them for the past 20 years. Seventy percent of the loans that small businesses seek are from $50,000-250,000. Without them, they find it difficult to survive and grow and this is a big social problem, in many ways, if we consider how many jobs in the private sector are created by small companies with less than 100 employees,” noted Delimpaltadaki.
At the same time, the co-founder of Equivico pointed out that "business" and a similar effort, even in small steps, is, in fact, the most feasible way to "social mobility" for citizens from the lower income groups, giving them an opportunity they will not have as long as they are constantly working as employees at a basic salary.
"When you have your own business in America, such as a laundry, a small construction company, a nail studio, you have the hope of social mobility. If you were born into a low-income family, you have two options for moving up into the middle class: either having your own small business or being given the opportunity to buy a home. The issue of small businesses is an important economic issue,” added Delimpaltadaki, emphasizing, at the same time, that social prejudices still exist, with women entrepreneurship or aspiring business owners coming from minority communities facing an increased rate of difficulty.
"Unfortunately, we have evidence that if you are an African-American business owner or generally a minority, or if you are a woman, you do not have the same access to capital. There are many studies that show intentional or unintentional discrimination in the financial system. Studies have shown that an African-American man or woman is often discouraged from borrowing by a man the moment he or she enters the bank. It is not an arbitrary conclusion. A woman or a person of color is treated differently.”
The pandemic and the cooperation with the SNF
The COVID-19 pandemic and the restrictive measures taken were another blow to the viability of small businesses, which – in combination with the aforementioned pathogens of the banking system, in terms of accessibility – proved fatal for many of them.
According to Delimpaltadaki, this was the point of Equivico's great intervention, with the support of the Stavros Niarchos Foundation: A multifaceted small business financing program across the country, with flexible and fair terms, which includes subsidies but -mostly- fair access to business loans.
“We all saw in the news – but also in our daily lives – how much small businesses suffered. They closed one after the other for months. Jobs were lost and many families lost their livelihoods. Also, government loans (PPP loans), at least in the first phase, were not properly distributed to small businesses. On the contrary, the banking system put them on the sidelines and mainly served the largest businesses. So, even if the government intended to help them, the banks left them out. Here, then, comes the collaboration with the Stavros Niarchos Foundation (SNF), with the aim of initially helping these businesses, given the consequences of the pandemic, said Delimpaltadaki, pointing out that the emphasis will not only be on survival, but, mainly in development.
"The program has two parts. The first, which was completed, was about support through financial assistance, but also the provision of know-how. The program involved 65 small businesses across the country, from Hawaii to Texas and from New York to Washington and Ohio. In June, we completed these donations and offered each company an amount of about $20,000, while in the coming months, we will give access to a training program. Of course, we check on how this money is used, which is available for a very specific purpose. The amount is significant for such businesses. In any case, we do not focus only on covering some expenses and returning to normal. We are also interested in development,” Delimpaltadaki told TNH, noting that the key point is the lending program.
“The lending program will start in the coming weeks. An amount of $1.3 million in such loans will be allocated, with the contribution of the SNF. The interest rate is small – it does not exceed 2.5%, which is purely formal and symbolic. The SNF is taking the first step to show that there should be access to lending for small businesses, proving that the money does come back. This sets the example for the banks. These are amounts up to $250,000 which the small businesses urgently need,” Delimpaltadaki said.
More information is available online: www.equivico.com/ncrc-business-grants.