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JP Morgan Chase and the Kellogg Foundation, in partnership with the Detroit Development Fund are stepping up to the plate by providing a $6.5 million loan fund for Detroit minority-owned small businesses. Detroit over the past few years has been at the forefront of negative press with its slow economic recovery from the recession, local government corruption and a loss of population that at its peak in the 1950s was around 1.86 million, and dwindled to around 680,000 in 2014. But the city is fighting back!
The ray of hope that these corporations are trying to inspire are the approximately 32,000 minority-owned small businesses in Detroit. According to the U.S. Census, Detroit ranks 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 wealth than on outside debt or equity. 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 locally and further contribute to the city’s recovery.
Funding of the loan fund was split between a $3.5 million grant provided by Chase and $3 million in program-related investments from the Kellogg Foundation. The fund will provide short- and long-term loans ranging from $50,000 to $150,000. 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. Eligibility is based upon ownership majority by people of color or having more than half their workforce made up of people of color.
To learn more about eligibility and requirements, you can call the Detroit Development Fund at (313) 784-9547.
To apply, you will need a business plan. Learn how to write a business plan in 4 hours or less.
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