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The Detroit Development Fund (DDF), JPMorgan Chase & Co. and
the W.K. Kellogg Foundation (WKKF) today announced a new $6.5
million lending program for Detroit businesses owned by
entrepreneurs of color and businesses that primarily hire people of
color. The Entrepreneurs of Color Fund will boost economic
opportunity for minority-owned businesses in Detroit by providing
them with greater access to capital and business assistance,
allowing them to grow, hire local and further contribute to the
city's recovery.
Facilitated by DDF, a Michigan 501(c)3 Community Development
Financial Institution (CDFI), the Fund will seek to provide
financing for general contractors, small retailers and other
neighborhood service businesses along with many other types of
businesses. The Fund will help businesses that traditionally have
lower credit quality, lack access to capital and staffing and
primarily serve Detroit's neighborhoods.
Small businesses have historically been at the heart of economic
growth in Detroit, and they have the potential to reduce
unemployment and expand opportunity for Detroiters. There are
approximately 32,000 minority-owned small businesses in Detroit,
according the U.S. Census. This ranks Detroit as the fourth largest
U.S. city for the number of minority-owned businesses. Yet, despite
their importance to the economy, recent research by Michael S.
Barr, Professor of Law at the University of Michigan, says
minority-owned businesses rely significantly more on investments of
personal or family wealth than on outside debt or equity.
"For Detroit's comeback to be a true success, there must be
opportunity for the Detroiters who have stayed," said Detroit Mayor
Mike Duggan. "This new program fits perfectly with the work my
administration is doing with Ken Harris and the Michigan Black
Chamber of Commerce to make sure Detroit residents who want to
start a business in their city have access to the capital and
support they need to be successful."
"The Entrepreneurs of Color Fund is very exciting for us and the
Detroit small businesses it will support," said Ray Waters,
President, DDF. "The unique structure of the Fund allows DDF to
provide a variety of lines of credit and loans to accommodate the
needs of entrepreneurs of color. We are pleased to facilitate the
pilot program and are grateful for the support of JPMorgan Chase
and the W.K. Kellogg Foundation. We look forward to growing our
lending in minority communities."
Through a $3.5 million grant provided by the JPMorgan Chase
Foundation, as part of its $100 million commitment to the Detroit's
economic recovery, and $3 million in program-related investments
from the Kellogg Foundation, the Entrepreneurs of Color Fund will
provide short and long-term loans. Loan sizes will vary, but the
average loan will range from $50,000 to $150,000. The Kellogg
Foundation developed and initiated the Fund because of its
long-standing commitment to equity and to Detroit.
Businesses receiving financing will be able to use the capital
to expand, finance equipment, address short-term cash flow needs
and provide contractor lines of credit. The Fund will also provide
small business loan recipients with technical assistance such as
networking, marketing, business plan development and cash flow
management. Eligible small businesses must be majority owned by
people of color or have more than half their workforce made up of
people of color. During implementation of this initiative, DDF will
also work with Max M. & Marjorie S. Fisher Foundation's Detroit
entrepreneurship programming efforts.
"Neighborhood businesses are critical to Detroit's comeback, but
many need access to the right capital to grow and thrive," said
Janis Bowdler, Head of Community Development for Global
Philanthropy, JPMorgan Chase. "The Entrepreneurs of Color Fund is a
unique approach that combines flexible financing and services to
strengthen continued business growth in Detroit's
neighborhoods."
"The Kellogg Foundation is not new to the idea of creating
access to capital for people of color," said La June Montgomery
Tabron, WKKF's President and CEO. "We know that investment in
people of color is essential for equitable and effective urban
development and this nation's sustained economic dominance. We are
proud partners with Detroit Development Fund, JPMorgan Chase and
others who will join us to improve the economic opportunities for
entrepreneurs, who are also parents, to better support their
families and ensure success for Detroit's kids."
Funding will allow the Entrepreneurs of Color Fund to provide
loans and technical assistance and establish a loan loss reserve.
The reserve will allow DDF to expand its lending criteria and help
Detroit small businesses that traditionally did not qualify for a
loan.
"Detroit's strength has always come from entrepreneurs who have
a great idea and can build that into a business that thrives and
creates jobs," said U.S. Senator Debbie Stabenow. "This new
public-private partnership will help business owners succeed and
grow, creating jobs and opportunity across the region."
Michael Barr's recent research, Minority and Women
Entrepreneurs: Building Capital, Network, and Skills, published by
the Hamilton Project of the Brookings Institution, calls for
greater support for minority-owned and female-owned small
businesses.
"Minority-owned businesses, including those in Detroit, often
lack access to credit, to essential skills needed to survive and
grow, and to business networks for mentoring and new business
opportunities," said Michael S. Barr, Professor of Law at the
University of Michigan. "Increasing business formation by minority
and female entrepreneurs is critical to improving the rate of
entrepreneurship for the country as a whole, and generating new
growth and jobs."
Interested Detroit small businesses can learn more about
eligibility by contacting the Detroit Development Fund at (313)
784-9547 or vholsey@detroitdevelopmentfund.com.
About the Detroit Development Fund
DDF was established in 1996 with a mission to "improve the
quality of life for residents in underserved Detroit
neighborhoods." A 501(c)(3) and certified as a CDFI, DDF provides
term loans and lines of credit to small businesses, small
contractors, and for-profit and nonprofit affordable housing
developers. DDF currently manages $23 million in loan capital.
Since lending activities began in 2002, DDF has closed over $36
million in loans to businesses in Detroit, which helped to retain
approximately 1,200 jobs and created approximately 1,800 new jobs.
Approximately 72 percent of DDF's small business loans have been
made to minority owned companies, and over 1,400 housing units were
rehabbed as a result of DDF's loans. DDF lending activities have
leveraged over $200 million in public/private investments with more
than $7 million in projects under management.
About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global
financial services firm with assets of $2.4 trillion and operations
worldwide. The Firm is a leader in investment banking, financial
services for consumers and small businesses, commercial banking,
financial transaction processing, and asset management. A component
of the Dow Jones Industrial Average, JPMorgan Chase & Co.
serves millions of consumers in the United States and many of the
world's most prominent corporate, institutional and government
clients under its J.P. Morgan and Chase brands. The firm uses its
global resources, expertise, insights and scale to address some of
the most urgent challenges facing communities around the world
including the need for increased economic opportunity. Information
about JPMorgan Chase & Co. is available at
www.jpmorganchase.com.
About the W.K. Kellogg Foundation
The W.K. Kellogg Foundation (WKKF), founded in 1930 as an
independent, private foundation by breakfast cereal pioneer Will
Keith Kellogg, is among the largest philanthropic foundations in
the United States. Guided by the belief that all children should
have an equal opportunity to thrive, WKKF works with communities to
create conditions for vulnerable children so they can realize their
full potential in school, work and life. The Kellogg Foundation is
based in Battle Creek, Michigan, and works throughout the United
States and internationally, as well as with sovereign tribes.
Special emphasis is paid to priority places where there are high
concentrations of poverty and where children face significant
barriers to success. WKKF priority places in the U.S. are in
Michigan, Mississippi, New Mexico and New Orleans; and
internationally, are in Mexico and Haiti. To learn more, visit
www.wkkf.org or follow WKKF on Twitter at @wk_kellogg_fdn.
Media:Detroit Development FundRay Waters, 313-784-9567President
of Detroit Development
Fundrwaters@detroitdevelopmentfund.comorJPMorgan ChaseSteve
O'Halloran, 302-282-5699steve.ohalloran@chase.comorW.K. Kellogg
FoundationDana Linnane, 269-969-2301dana.linnane@wkkf.org
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September 15, 2015 09:00 ET (13:00 GMT)
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