In 2015, small businesses in Detroit welcomed a new program for minority-owned enterprises.
The Detroit Development Fund (DDF), J.P. Morgan Chase and the W.K. Kellogg Foundation (WKKF) have announced the first four recipients of loans from the Entrepreneurs of Color (EOC) Fund.
Businesses receiving the first round of funding are:
- Power, Lighting and Technical Services, Inc. (PLTS), providing electrical design and construction for commercial, industrial and residential clients. It will receive a $100,000 contractor line of credit and loan.
- Priceless Preservation’s Construction Co. (PPC), providing high-quality construction work across the Motor City. It will receive a $50,000 contractor line of credit.
- LoveLifeSwagger, providing high-quality, U.S. made street wear products. It will receive a $30,000 line of credit.
- House of Pure Vin, aiming to become a wine retailer in downtown Detroit. It will receive a $145,000 loan.
Backing Small Businesses
The $6.5 million program is aimed at boosting small businesses that are either owned by entrepreneurs or that mainly hire people of color.
Facilitated by DDF, a Michigan 501(c)3 Community Development Financial Institution (CDFI), the fund provides financing for Detroit-based “businesses that lack access to traditional forms of credit and capital.”
Commenting on the find’s potential in a recent release, Detroit Mayor Mike Duggan said, “There is incredible opportunity for small businesses here in Detroit, and this loan program from the Detroit Development Fund, J.P. Morgan Chase and the W. K. Kellogg Foundation will ensure that businesses here have access to the resources they need to prosper.”
The University of Michigan Law School and J.P. Morgan Chase also announced the Detroit Neighborhood Business Project (DNBP), a new program that addresses growth barriers and provides legal support to local businesses. Using a $127,000 grant from J.P. Morgan Chase, eight law students — with faculty supervision — will provide legal assistance to small businesses.
“Small businesses suffer from a well-documented lack of access to capital, business and legal advice, and networks for mentoring and business opportunities. University of Michigan faculty and students can help address these barriers to growth,” comments Michael S. Barr, Professor of Law at the University of Michigan
The project will also draw in faculty and students from other schools to better support small business needs.
With approximately 32,000 small businesses owned by people of color, Detroit is the fourth largest U.S. city for minority-owned businesses. Yet, these businesses are dependent on the investments of personal or family wealth.
The EOC Fund attempts to change this status quo.
By providing financial support, the fund will help minority-owned businesses to grow, create new jobs and boost Detroit’s ailing economy.
It will be interesting to see how the program shapes up for small businesses owned by people of color in Detroit because its success could be a prototype for similar programs in other parts of the country as well.
Image: Astro Coffee, Detroit Development Fund