Small-business lending in Detroit is getting a $5 million boost through the newly created Detroit Microloan Collaborative.
The funds came care of Columbus, Ohio-based Huntington Bank via a line of credit to the Detroit Development Fund to launch the collaborative. The program will provide loans of $5,000 to $100,000 to Detroit-area small businesses that fall outside of traditional lending parameters. The program focuses on woman- and minority-owned businesses but will be available to others as well.
“We have seen that there is a definite need for microloans in the area,” said Renee Williams, Huntington’s vice president/community development executive for Michigan. “Access to capital to all levels of business is really important, and that is what microlending provides. We see it as an opportunity to help with economic growth overall.”
Detroit has seen its small business lending all but disappear entirely according to a recent report by the Federal Reserve Bank of Chicago. Black and female owned businesses have been particularly hard hit since entrepreneurs have stared fleeing D-Town.
“One of the challenges in this market isn’t capital as much as making sure that companies are ready for a loan,” Waters said. “They don’t have financial statements; they don’t know how to approach a lender. We knew we’d have to get them ready,” said Ray Waters, president of the Detroit Development Fund, and Dave Egner, executive director of the Detroit-based nonprofit New Economy Initiative.