Two of the great icons of Corporate America—the investment bank Goldman Sachs and the billionaire investor Warren Buffett—announced on Tuesday that they would team up to inject $500 million plus mentoring and financial expertise into the small business sector.
Citing the “vital role” small businesses play in creating wealth, fostering innovation, and adding jobs, Goldman chairman and CEO Lloyd C. Blankfein outlined an ambitious agenda for small business aid. The blue-chip investment bank he runs plans to invest $300 million into Community Development Financial Institutions, which will in turn finance private companies.
The bank will spend another $200 million to educate small-business owners through business programs at colleges and universities.
In addition, members of Goldman’s staff will be encouraged to volunteer as mentors for small business owners.
The announcement of this new initiative comes at a time when Goldman Sachs has been under scrutiny for its remarkable financial turnaround following the TARP bailout. The bank reported record profits in the second quarter and is on track to pay billions in bonuses and in other compensation to its nearly 30,000 workers. The pledge to help Main Street businesses is being perceived as an effort to quell the public-relations maelstrom that has swirled around the company in recent weeks.
In all, 10,000 small businesses are expected to receive assistance through the program. “Our recovery is dependent on hard working small business owners,” Buffett said in a statement.