Minority-owned businesses often lack access to many factors that could contribute to their success — startup funding, sufficient working capital, and lending/banking expertise. That was one of the points made last year by panelists who took part in our Black Economic Empowerment Roundtable, and it looks as though large employers have been listening.
In the past several months, American Family Insurance announced a $400,000 revolving loan program for new and emerging minority businesses that will be located in the new minority-business hub in Madison. AmFam’s partner, the Urban League of Greater Madison, aims to grow the fund to at least $1 million by June 30 and begin making a mix of loans and grants to a variety of new or early-stage, minority-owned businesses for location in the hub, which reportedly will be developed at the Village on Park mall. Loans averaging $20,000 each will be made available to businesses at low interest rates with no collateral required.
Just as important as the funding, minority businesses will have access to a full complement of technical assistance, including individual coaching to develop strategic business plans, connections to other business support resources, and access to a network of culturally competent business experts. This community investment is part of American Family’s “Free to Dream” initiative for which the company recently pledged $105 million over the next five years.
Meanwhile, BMO Harris Bank has launched a new $500 million lending program that is focused on minority-owned businesses, and one of the stated reasons is to ensure an inclusive economic recovery from the COVID-19 pandemic. Anthony Hudson, managing director and head of the economic equity advisor group for BMO, is leading this lending program, which is part of a broader five-year, $5 billion commitment called the BMO EMpower initiative. It addresses barriers faced by minority businesses, communities, and families, and the idea is to take on barriers to inclusion and create more opportunity for recovery through lending, investing, and engagement.
The news from BMO Harris and AmFam comes on the heels of another thrust called IFundWomen of Color, courtesy of Caress brands and American Express, which also aims to close the funding gap for Black and other minority entrepreneurs and provides mentorship and technical assistance.
A rising tide of government stimulus doesn’t have to lift all the boats. I can’t wait to see what the business community comes up with next.
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