Fund for Detroit minority small business owners swells to $18 million
Original Article by John Gallagher at Detroit Free Press
A fund aimed at helping minority owners of small businesses in Detroit strengthen their operations will triple in size thanks to new investments by JPMorgan Chase and other investors.
The Entrepreneurs of Color fund, launched in 2015 with $6.5 million, will swell to more than $18 million as new donors add to the investments already made by Chase, the W.K. Kellogg Foundation, and the nonprofit Detroit Development Fund.
New investors include the Ralph C. Wilson Foundation, Fifth Third Bank and the Kresge Foundation.
Detroit entrepreneur Felicia Maxwell of Fit4Life gym received assistance from the Entrepreneurs of Color fund created by JPMorgan Chase and W.K. Kellogg Foundation. (Photo: Detroit Development Fund)
The Entrepreneurs of Color fund has made loans to 43 minority small businesses in Detroit, assistance that helped create or preserve more than 600 jobs. Some 53% of the loans have gone to minority firms owned by women. Overall, about 70% supported small businesses based in Detroit neighborhoods, according to data from Chase.
With only one loan default so far in the program, Chase is planning to launch similar loan funds for minority-owned small businesses in San Francisco and South Bronx in New York, applying lessons learned from the Detroit experience.
Part of Chase’s $150 million commitment to Detroit’s economic recovery, announced in 2015, the loan fund administered by the Detroit Development Fund provides monetary and technical assistance to minority business owners who often struggle to get a foothold in Detroit’s troubled economy.
The need is immense. U.S. Census data show that there are about 50,000 minority-owned small businesses in Detroit, one of the largest concentrations in the nation. But the vast majority have no employees beyond the owner, and many lack access to capital and technical assistance available to mainstream business owners in stronger economic climates.
“Our Entrepreneurs of Color Fund has created great economic opportunity for minority-owned small businesses in Detroit this year,” said Ray Waters, president of the Detroit Development Fund. “This expansion of the fund will create countless new jobs and bring new goods and services to even more neighborhoods in the coming years.”
Mayor Mike Duggan thanked Chase and other investors for their efforts.
“We’re doing everything we can in Detroit to create more opportunities for people of color and providing entrepreneurs greater access to the small business capital they need to succeed is helping us accomplish that,” Duggan said in a statement. “We need more, so I’m very grateful to JPMorgan Chase for encouraging investors to work together and grow the Entrepreneurs of Color Fund, and for its ongoing support in the revitalization of our city.”
One recipient of the the program loans, Felicia Maxwell, opened her Fit 4 Life fitness center on West McNichols in October. She received a $60,000 loan from the Entrepreneurs of Color fund. She also received help from the Motor City Match program for entrepreneurs. Both programs are aimed at establishing businesses in Detroit neighborhoods.
Passionate about her own fitness, she left a career in banking and operated a gym for friends in her basement before getting the help to open her center.
“I was comfortable but I knew I was supposed to be pushed and to grow,” she said.”The neighborhood, they’ve received me so well. I would say 80% of the people who come here said, ‘This is a dream come true.’ It’s been wonderful.”
Jamie Dimon, chairman and CEO of JPMorgan Chase, was visiting the Detroit area Wednesday and Thursday to promote the effort.
“Thanks to this fund, minority-owned small businesses are rebuilding homes, repairing streetlights and opening neighborhood retail stores, and their entrepreneurial spirit is a big part of Detroit’s continued comeback,” Dimon said in a statement. “When a fund like this is successful, we want to help it reach more small businesses, and that’s exactly what we’re doing by encouraging investors to collaborate and taking this model to help entrepreneurs in San Francisco and the South Bronx next year.”
Business owners with questions about the Entrepreneurs of Color fund may call the Detroit Development Fund at 313-784-9547.
Contact John Gallagher: 313-222-5173 or firstname.lastname@example.org. Follow him on Twitter @jgallagherfreep.com.
Editor’s note: A previous version of this story gave the wrong location for Fit 4 Life fitness. It is located on West McNichols. This story has been updated.