Access to funding is often a barrier blocking the development of minority-owned businesses – but now a collaboration of regional organizations is attempting to tear down that obstacle.
With a focus on bringing capital to African-American and other underserved business owners, the National Urban League’s Urban Empowerment Fund (NUL-UEF
), Morgan Stanley
, National Development Council (NDC
) Urban League of Greater Cleveland (ULGC
), and Cuyahoga County
have teamed up to offer the Capital Access Fund of Greater Cleveland (CAF
The $8 million fund was created with a long-term goal of sustaining minority-run small businesses that provide jobs for residents, says Marsha Mockabee, president and CEO of the Cleveland Urban League.
A three-year program, CAF offers entrepreneurs low-interest loans from $10,000 to $2 million. Funds are tabbed for the acquisition of equipment, space or inventory. Borrowers are charged no higher than 5 percent interest, but must participate in pre- and post-loan counseling that provides them with support throughout the growth process.
"We're not just loaning people money and saying, 'good luck,' we're staying with them as a finance partner," says Mockabee.
Launched in December with the target of creating 300 jobs over its lifespan, CAF has already completed eight loans totaling $1.4 million. Among the recipients are a child-care business, a staffing firm and a pop-up shop that makes greeting cards and political-themed jewelry.
CAF assets derive from two sources - the Community Impact Loan Fund and the county-supported Grow Cuyahoga Fund. Dollars are given to existing businesses with a track record of sales, and officials hope to distribute 50 loans before the program concludes.
"Our goal is to run out of money before the three years are up," Mockabee says. "It's a very aggressive plan."
CAF is also an attractive option for minority entrepreneurs still searching for financial stability in a post-recession environment, she says. As small business creation is a priority of Cuyahoga County leadership, the loan program gives companies a boost both through capital and the support services necessary to build community wealth.
"Raising the profile and success level of minority businesses can fuel the pipeline of economic development in these communities," says Mockabee. "We're proud of all of our partners willing to invest in this program."
Those interested in applying for a CAF grant may contact Angela Butler, senior vice president, National Development Corporation, 216-303-7173, [email protected].