By Ryan Velez
Entrepreneurs often have to grapple with the fact that finding financing to initially open or expand their businesses is one of the most difficult challenges they will ever face. This is generally increased several times over for entrepreneurs of color, who also have to deal with many other barriers to business success. Black Enterprise reports that Chicago City Treasurer Kurt Summers, working with lenders, is aiming to help small business owners in the Windy City overcome that barrier.
This project is SimpleGrowth, a new online lending marketplace, a combined venture between the national advocacy group Small Business Majority, a national online lender Fundera, and micro-lender Accion. Officials describe it as a first-of-its-kind local lending portal, allowing African American entrepreneurs in Chicago to connect with area lenders via a website. How does it accomplish this goal? By providing small business owners access to affordable financing and business assistance. This is done without having to fill out multiple applications.
Organizers are also looking to provide Chicago entrepreneurs with a one-stop-shop to get non-predatory business loans. Individuals can seek loans ranging from $500 to $500,000 at various rates, depending on the business owner’s readiness and other factors. Businesses can apply to the loans for free, funded by Chicago lenders including Accion, Local Initiatives Support Corporation Small Business and the Women’s Business Development Center, all Community Development Financial Institutions that support small business entrepreneurship. Businesses can apply for the loans for free.
Observers say that this could be an ideal resource for Black businesses in Chicago, which could make good use of the funds. There are 230,000 small businesses in Chicago, but an unusually high percentage of those businesses are owned by African Americans. Cook County, Illinois—which includes Chicago—has the most African American-owned small businesses of any county in the country at 110,000, the U.S. Census Bureau’s 2012 analysis of small businesses reports.
Lindsay Mueller, midwest director for Small Business Majority, says since there are so many African American-owned small business in the Chicago area, and “we know minorities and women have the most trouble obtaining small business loans, Chicago seemed to have a need for a tool like SimpleGrowth.”
Summers notes that this makes Chicago the nation’s first city to put together such a lending technology. “Healthy businesses support thriving communities and improve the overall picture of economic development for residents,” he says. “This SimpleGrowth tool is another leap forward in my office’s mission of boosting the economy and creating a climate for job creation, especially in traditionally underrepresented neighborhoods.”