BankBoston is the nation's first bank to form a community development company with the sole purpose of supporting small businesses in inner-city communities. The bank's newly christened BankBoston Development Company (BBDC) L.L.C. will commit $100 million over the next four years to businesses operated by women and minorities in four New England states and parts of Florida.
Unlike other bank-operated community development corporations, which were set up to provide affordable housing, legal reforms by federal regulators have given BBDC the chance to offer small businesses access to major capital markets, credit and financial advice. The aim is to improve local economies by creating new jobs in downscale urban areas, but BBDC also expects measurable profits from the venture, perhaps an after-tax return on capital investment as high as in the teens, says BBDC President Grady Hedgespeth. "We're helping to build companies that will become part of our future business."