Detroit Development Fund, JPMorgan Chase and the W.K. Kellogg Foundation Announce First Loan Recipients of the Entrepreneurs of Color Fund
Four Detroit-based minority-owned small businesses receiving $325,000 in loans are providing lighting, construction and retail services from the city's neighborhoods to downtown
December 3, 2015 (Detroit) – The Detroit Development Fund (DDF), JPMorgan Chase & Co. and the W.K. Kellogg Foundation (WKKF) today announced the first four Detroit-based minority-owned small businesses receiving loans and lines of credit from the Entrepreneurs of Color (EOC) Fund. The lending from this $6.5 million program is going to Detroit-based neighborhood businesses owned by entrepreneurs of color and businesses that primarily hire people of color.
The EOC Fund, which is facilitated by DDF, a Michigan 501(c)3 Community Development Financial Institution (CDFI), provides financing for Detroit-based neighborhood businesses and services with a goal of assisting businesses that lack access to traditional forms of credit and capital. Funding for the EOC Fund is provided by a $3.5 million grant from the JPMorgan Chase Foundation, as part of JPMorgan Chase's $100 million commitment to the city of Detroit's economic recovery, and a $3 million program-related investment from the WKKF.
"From the neighborhoods to downtown, Detroit's success is tied to the success of its residents and growth of its businesses," said Detroit Mayor Mike Duggan. "There is incredible opportunity for small businesses here in Detroit, and this loan program from the Detroit Development Fund, JPMorgan Chase and the W. K. Kellogg Foundation will ensure that businesses here have access to the resources they need to prosper."
The EOC Fund is designed to increase economic opportunity for underserved populations in Detroit by providing minority-owned businesses with greater access to capital and business assistance, allowing them to grow, hire locally and further contribute to the city's economic recovery.
"With the Entrepreneurs of Color Fund we are now able to provide the capital that Detroit's small businesses need to grow and succeed," said Ray Waters, President, DDF. "We are grateful for the generous support of JPMorgan Chase and the W.K. Kellogg Foundation, which will allow DDF to increase its business support and lending programs for minority-owned businesses in Detroit's neighborhoods."
The four businesses receiving the inaugural round of funding include:
- Power, Lighting and Technical Services, Inc. (PLTS) – $100,000 Contractor Line of Credit and Loan – PLTS, located in Barton-McFarland on Detroit's west side, provides electrical design and construction for commercial, industrial and residential clients. DDF funding will help PLTS execute on a recently secured, three-year contract from the City of Detroit to repair exterior building lights at several properties including recreation centers, police stations, fire departments and city-owned office buildings.
- Priceless Preservation's Construction Co. (PPC) – $50,000 Contractor Line of Credit – Also located on the west side of Detroit, PPC provides high quality construction work across the Motor City and was recently awarded construction projects in partnership with the Rehabbed and Ready Program, a Detroit Land Bank, Quicken and Home Depot initiative to help boost residential property values in Detroit. The EOC Fund line of credit will be used to fulfill contracts to renovate properties owned by the Detroit Land Bank.
- LoveLifeSwagger - $30,000 Line of Credit – Based in downtown Detroit, LoveLifeSwagger provides high quality, U.S.-made, street wear products to the urban fashion market. Products are manufactured in several U.S. based facilities including one on Detroit's Eastside. Capital from the EOC Fund will be used to assist with business expansion and job creation.
- House of Pure Vin – $145,000 Loan – House of Pure Vin is seeking to become the wine retail store destination in downtown Detroit. Over half of House of Pure Vin's inventory will come from locally-sourced Michigan vineyards. The loan from the EOC Fund will be used to finance the start-up costs of the wine retail store.
"The success of minority-owned small businesses in neighborhoods across Detroit is critical to the city's continued economic recovery," said Peter Scher, Head of Corporate Responsibility for JPMorgan Chase. "By providing them with greater access to credit, more entrepreneurs will have opportunities to thrive and grow for years to come."
There are approximately 32,000 small businesses in Detroit owned by people of color, according the U.S. Census Bureau. This ranks Detroit as the fourth largest U.S. city for the number of minority-owned businesses. Yet, these businesses rely significantly more on investments of personal or family wealth than on outside debt or equity, according to recent research by Michael S. Barr, Professor of Law at the University of Michigan.
"This is a partnership that we're certain will yield formidable results for entrepreneurs of color in Detroit," said La June Montgomery Tabron, W.K. Kellogg Foundation President and CEO. "We know intentional investment in these entrepreneurs is crucial in helping make these small businesses sustainable, in increasing jobs and in supporting equitable urban development and Detroit's recovery."
The University of Michigan Law School and JPMorgan Chase today also announced the Detroit Neighborhood Business Project (DNBP), a new program to address barriers to growth and provide legal support for Detroit's neighborhood small businesses. Using a $127,000 grant from JPMorgan Chase, eight law students, with faculty supervision, will work with small businesses each semester by providing legal advice on entity formation, employment, intellectual property leasing and other real estate transactions, and contracts for goods or services. The project will also draw in faculty and students from other schools and departments across the University of Michigan to better meet small business needs. The DNBP will join a number of technical assistance programs who are all working to solve pressing problems in Detroit's small business community.
"We are thrilled to be partnering with JPMorgan Chase, the Detroit Development Fund and other local organizations to help small businesses and entrepreneurs in Detroit's neighborhoods," said Michael S. Barr, Professor of Law at the University of Michigan. "Small businesses suffer from a well-documented lack of access to capital, business and legal advice, and networks for mentoring and business opportunities. University of Michigan faculty and students can help address these barriers to growth."
Funding from the JPMorgan Chase Foundation and the WKKF will allow the EOC Fund to provide loans and technical assistance and establish a loan loss reserve. The reserve will allow DDF to expand its lending criteria and help Detroit small businesses that do not qualify for a traditional loan.
Interested Detroit small businesses can learn more about eligibility by contacting the Detroit Development Fund at 1-313-784-9547 or email@example.com.
About the Detroit Development Fund
DDF was established in 1996 with a mission to "improve the quality of life for residents in underserved Detroit neighborhoods." A 501(c)(3) and certified as a CDFI, DDF provides term loans and lines of credit to small businesses, small contractors, and for-profit and nonprofit affordable housing developers. DDF currently manages $23 million in loan capital. Since lending activities began in 2002, DDF has closed over $36 million in loans to businesses in Detroit, which helped to retain approximately 1,200 jobs and created approximately 1,800 new jobs. Approximately 72 percent of DDF's small business loans have been made to minority owned companies, and over 1,400 housing units were rehabbed as a result of DDF's loans. DDF lending activities have leveraged over $200 million in public/private investments with more than $7 million in projects under management.
About JPMorgan Chase & Co.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.4 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. The firm uses its global resources, expertise, insights and scale to address some of the most urgent challenges facing communities around the world including the need for increased economic opportunity. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
About the W.K. Kellogg Foundation
The W.K. Kellogg Foundation (WKKF), founded in 1930 as an independent, private foundation by breakfast cereal pioneer Will Keith Kellogg, is among the largest philanthropic foundations in the United States. Guided by the belief that all children should have an equal opportunity to thrive, WKKF works with communities to create conditions for vulnerable children so they can realize their full potential in school, work and life. The Kellogg Foundation is based in Battle Creek, Michigan, and works throughout the United States and internationally, as well as with sovereign tribes. Special emphasis is paid to priority places where there are high concentrations of poverty and where children face significant barriers to success. WKKF priority places in the U.S. are in Michigan, Mississippi, New Mexico and New Orleans; and internationally, are in Mexico and Haiti. To learn more, visit www.wkkf.org or follow WKKF on Twitter at @wk_kellogg_fdn.
Detroit Development Fund: Ray Waters, President of Detroit Development Fund, firstname.lastname@example.org, 313.784.9567
JPMorgan Chase: Steve O'Halloran, email@example.com, 302.282.5699
W.K. Kellogg Foundation: Dana Linnane, firstname.lastname@example.org, 269.969.2301