New Loan Options Encourage Wisconsin's African-American Entrepreneurship
For the first time, Wisconsin’s state economic development arm is targeting business development specifically in the African-American community.
The revolving loan fund just launched by the Wisconsin Economic Development Corporation, in partnership with Milwaukee’s African-American Chamber of Commerce, is the latest in a series of initiatives targeting specific communities facing specific challenges.
Secretary of WEDC Reed Hall says the agency has been helping minority business owners, both beginners and those with experience, for some time. Previously, WEDC has focused on minority groups such as Native American and Hmong business owners.
Under this new partnership, the agency will grant loans to African-American business owners, some of whom have been rejected by banks based on financial histories and lack the requirements many banks seek.
The loans will range from $5,000 to $25,000. WEDC's Hall says the loans are "revolving," meaning they can be borrowed, repaid and borrowed again throughout the length of time of the arrangement. They are to be paid back within one to three years.
He says these loans will put more money into the community, creating jobs and providing goods and services.
“We are trying to advance business development in the minority area…and hopefully we will produce some great jobs out of these programs,” says Secretary Hall.
Dr. Eve Hall, President and CEO of the African American Chamber of Commerce, says the partnership signifies an important relationship between the Chamber's cause and the state. The “seed money” for the partnership started at $200,000, split between WEDC and the Chamber.
Applications for the revolving loans are reviewed by a committee of bank representatives and organization leaders. Although the applicants may not have the financial backgrounds banks prefer, Dr. Hall says the committee will give more leeway, hoping to encourage minority business owners to establish and grow their businesses. This will also give them the history that banks look for when owners are applying for loans in the future.
“We still see that maybe they don’t have all the assets, but they seem to be someone of integrity, who is going to be able to make the payments, and has identified other ways to guarantee that they will be on top of what they are supposed to do,” says Dr. Hall.