Capital is often one of the biggest barriers to success for entrepreneurs, especially for many minorities, who have less wealth as a community, which makes it problematic to qualify for loans. That’s why the news that Detroit’s Entrepreneurs of Color Fund (ECF) has hit $18 million in reserves is a game-changer.
Lead by the Detroit Development Fund, which is backed by JPMorgan Chase and W.K. Kellogg Foundation, the organization was created to give small business owners of color access to loans and lines of credit for development, construction, equipment and other business needs. Business owners can borrow from $50,000-$150,000 and interest rates range from 6% to 9%.
“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,” Mayor Mike 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.”
Back in 2013, the city of Detroit filed for bankruptcy protection. Since then, the region has been diligently working to generate revenue, including revitalizing local business and housing markets. Programs like ECF prevent minorities from being completely locked out of a growing economy by creating inroads to long-term ownership as the market continues to grow. According to Crain’s, approximately 43 business have borrowed $4.5 million for growth efforts in the last two years. The program has helped create or preserve 600 jobs, and 53% of the business owners are women. Only one person has defaulted.
The ECF is part of a larger effort by JPMorgan Chase—including a $150 million overall investment— to revitalize the city.
Interested in finding out more about the Entrepreneur’s of Color Fund? Click here.