Liberty Bank and Trust Company—the third largest Black-owned bank in the U.S.—is the latest institution to invest in Detroit’s Entrepreneurs of Color Fund, a loan fund that helps black-owned businesses in the city grow. The financial institution announced today they are providing $4 million, boosting the fund to $22 million.
“Entrepreneurs of color often don’t have consistent access to capital to fuel their basic operations and growth,” said Drextel Amy, President of Liberty’s Michigan Region in a news release to Black Enterprise. “Minority-owned business in Detroit are adding to the growth of Detroit and more specifically, the neighborhoods. It is crucial that we provide the capital to allow these entrepreneurs of color to participate and help in the economic rebirth of Detroit.”
JPMorgan Chase and the Kellogg Foundation announced in December 2017 that the fund had tripled in size to over $18 million from $6.5 million with the help of contributions from existing backers and new investors. To meet the demand of the fund, JPMorgan Chase and the Kellogg Foundation, who each made new investments of $2 million last year, recruited new funders to increase its size.
New investors include the Ralph C. Wilson, Jr. Foundation which invested $2.5 million, Fifth Third Bank at $3 million and the Kresge Foundation, which has committed to providing first loss guarantee up to $2 million, according to the release.
The fund was established in 2015 as part of JPMorgan Chase’s $150 million commitment to the economic rebirth of the Motor City. The Kellogg Foundation and Detroit Development Fund—who facilitates disbursement—created the fund to provide small minority-owned businesses access to capital and resources.
“As our Entrepreneurs of Color Fund continues to create jobs and bring much-needed goods and services to Detroit’s neighborhoods,” said Ray Water, President, Detroit Development Fund. “We have been more than pleased by the impact this fund has had on local small businesses and our community’s economy.”
The fund has provided nearly $6 million in loans and resources to minority-owned businesses—56 percent owned by minority women and 68 percent located in Detroit neighborhoods—since it was founded, Water told the Metro Times.
“We not only provide capital to business owners who otherwise almost certainly would not receive a loan, but we also provide assistance for business plans and projections to make them more loan-ready,” Water said.
The average loan from the fund runs between $50,000 and $200,000. The fund has lent $5.7 million to more than 54 small minority-owned businesses, creating over 750 new or preserved jobs, according to Black Enterprise.
“Things are getting better in Detroit, but we’ve got a long way to go,” Mayor Mike Duggan told Black Enterprise. “The Entrepreneurs of Color Fund is one of the most practical programs in helping us bring back the local economy.”