New Online Portal Offers Loans Up to $500,000 to African American Entrepreneurs in Chicago

Lending option needed in Chicago to help black small businesses grow, observers say

 

Obtaining financing to open or expand a business is among the biggest challenges for entrepreneurs of color.

But Chicago City Treasurer Kurt Summers, working with lenders, is aiming to help small business owners in the Windy City overcome that barrier.

The Launching of SimpleGrowth

 

The national advocacy group Small Business Majority, national online lender Fundera, and micro-lender Accion have developed SimpleGrowth, a new online lending marketplace. Calling SimpleGrowth a first-of-its-kind local lending portal, officials say the platform will allow African American entrepreneurs in Chicago to connect with area lenders via a website.

The portal is designed to provide small business owners access to affordable financing and business assistance without having to fill out multiple applications.

 

(Margo Strotter, owner of Ain’t She Sweet Café, taking orders after the launch of SimpleGrowth at her business in Chicago. Image: Small Business Majority and Russell Ingram, Ingram Photography)

 

Organizers also want to provide Chicago entrepreneurs a one-stop-shop to get non-predatory business loans and resources they need to strengthen their businesses.

Individuals can seek loans ranging from $500 to $500,000 at various rates, depending on the business owner’s readiness and other factors.

The financing will come from Chicago lenders including Accion, Local Initiatives Support Corporation Small Business and the Women’s Business Development Center, all Community Development Financial Institutions that support small business entrepreneurship. Businesses can apply for the loans for free.

High Percentage of Black-Owned Business

 

This lending for black-owned business in Chicago would be crucial, observers say.

There are 230,000 small businesses in Chicago, but an unusually high percentage of those businesses are owned by African Americans. Cook County, Illinois—which includes Chicago—has the most African American-owned small businesses of any county in the country at 110,000, the U.S. Census Bureau’s 2012 analysis of small businesses reports.

Lindsay Mueller, midwest director for Small Business Majority, says since there are so many African American-owned small business in the Chicago area, and “we know minorities and women have the most trouble obtaining small business loans, Chicago seemed to have a need for a tool like SimpleGrowth.”

 

(Lindsay Mueller, Midwest Director for Small Business Majority, walks Chicago City Treasurer Kurt Summers through SimpleGrowth’s online application. Image: Small Business Majority and Russell Ingram, Ingram Photography.)

 

Another report, completed by the Woodstock Institute, a Chicago-based research and advocacy firm, examined disparities in small business lending. The report mainly targeted smaller value loans under $100,000. Those are loans most likely to support smaller, local businesses that offer employment and wealth-building opportunities for local residents.

In the Chicago region, businesses in low-income census tracts constituted an average of 6.6% of all businesses in the region between 2012 and 2014, but they only got 3.5% of CRA-reported bank loans under $100,000 and 3% of the total amount of those loans during that period. If those businesses had received the loans in proportion to their share of all businesses in the Chicago region, they would have taken in nearly 10,400 more loans totaling nearly $141.6 million more than they collected between 2012 and 2014.

CRA, or the Community Reinvestment Act, encourage financial institutions like banks to meet the credit needs of the communities where they operate, including low- and moderate-income neighborhoods.

Chicago First City to Provide the Service

 

Summers says Chicago will be the nation’s first city to provide the lending technology.

“Healthy businesses support thriving communities and improve the overall picture of economic development for residents,” he says. “This SimpleGrowth tool is another leap forward in my office’s mission of boosting the economy and creating a climate for job creation, especially in traditionally underrepresented neighborhoods.”

John Arensmeyer, Small Business Majority founder and CEO, says lack of access to capital for small businesses is a major problem and is throttling our economy. “Small business owners represent 99% of employer firms, but many who seek financing under $250,000 are routinely denied with little recourse to find financing or business support elsewhere,” he says. “This level of financing is usually needed during critical growth phases for businesses.”

(Margo Strotter, the owner of Ain’t She Sweet Café and host of SimpleGrowth’s launch event, speaks about her experiences getting a loan through Accion Chicago and how SimpleGrowth will help local business owners like her. Image: Small Business Majority and Russell Ingram, Ingram Photography.)

 

Business owners who don’t qualify for a loan through SimpleGrowth’s Chicago-based lenders can apply through Fundera’s national platform. Other options include business credit cards, medium-term loans, and lines of credit.

Plus, the  SimpleGrowth platform will connect Chicago small businesses that don’t now qualify for loans to small business assistance centers across the city that can help with business advising, planning, and other support services.

To apply for loans and get more details visit: www.simplegrowth.biz.