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, which borrowed from and then repaid billions to the government through the TARP or Troubled Asset Relief Program, 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.

To help promote and direct the small-business program, the investment bank has lined up a roster of experts and former policy makers as advisors. Buffett, the bank's largest shareholder, will play a role, as will Michael E. Porter, a Harvard Business School professor and the founder of the Initiative for a Competitive Inner City. The Boston-based non-profit organization identifies and nurtures business opportunities in urban communities where poverty remains high. (Porter's group and Inc. have in the past partnered to publish a ranking called the Inner City 100.) 

Robert Litan of the Ewing Marion Kauffman Foundation; Leonard Schlesinger, president of Babson College; Glenn Hubbard, the dean of Columbia Business School; former Education Secretary Margaret Spellings; former New Orleans mayor Marc Morial; and Thomas Robertson, dean of the Wharton School have also signed on to advise Goldman as it moves into small-business consulting.

Though it is expected to serve businesses nationwide, the bank announced that the first groups of small businesses to receive aid would be in Goldman's own backyard. The first CDFI to receive funds, according to a press release issued by Goldman, is Seedco, a non-profit based in Manhattan's Flatiron District that helps low-income people by offering job-training and business-assistance programs. The first class of business owners to receive educational assistance will be in Queens, New York, at LaGuardia Community College, the press release said.

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.