Sherri Welch – Crain’s Detroit Business
The Capital Access report doesn’t quantify the amount of capital that’s been made available for loans and grants to underserved entrepreneurs in Detroit and the other two cities. But it’s clearly increased, Jones said, with support from groups including NEI, W.K. Kellogg Foundation, the Detroit Development Fund, JPMorgan Chase, Michigan Women Forward, ProsperUs and others.
Loans from banks to small businesses in Detroit as reported under the Community Reinvestment Act dropped 60 percent between 2008 and 2010, according to the report. Lending returned to pre-recession levels in 2015, but accessible capital remains elusive, particularly at the microloan level of loans of $50,000 or less.
Two organizations — ProsperUS and Michigan Women Forward — are the primary microloan providers for entrepreneurs in the Detroit area, but the current capacity and reach of these organizations is limited, according to the report.
Michigan Women Forward, which offers microloans between $2,500 and $50,000, disbursed 17 loans in Detroit in 2017. ProsperUS offers microloans of $5,000-$15,000 for startups and $25,000 for existing businesses. It also disbursed 17 loans to Detroit-area entrepreneurs in 2017.
Two other groups — Opportunity Resource Fund, a statewide, community development financial institution that provides affordable loans to underserved people and communities, and CEED Lending, a Livonia-based, U.S. Small Business Association microlender — both also offer microloans but have been less active in the Detroit area, the report’s authors said.
Combined, all of those lenders are making $2.5 million-$3 million in microloans in Detroit, Hamtramck and Highland Park each year, Jones said.
This is an excerpt from Crain’s Detroit Business. To read the full article, please click here.