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Mayor Rahm Emanuel today announced new partnerships that will help small business owners in neighborhoods throughout Chicago access needed capital. Following a successful pilot, the Small Business Opportunity Center Program (formerly Capital Access Centers), which helps small business owners prepare for loans, will expand from three to eight centers across Chicago and $5 million in funding is available for Chicago small businesses.
“Small businesses are the economic backbone of Chicago and when they succeed, our neighborhoods and our city succeeds,” said Mayor Rahm Emanuel. “By connecting our entrepreneurs with the resources and capital they need to thrive, they can create the jobs that our neighborhoods deserve and help to keep every community in Chicago more vibrant.”
New partners Somercor 504, Inc., Goldman Sachs, and the Chicago Business Opportunity Fund have more than $5 million available to lend to qualified small businesses. Both centers provide loans between $50,000 and $250,000 to small businesses – a loan size that more small businesses are having trouble securing. They will join the Latin American Chamber, Sunshine Gospel Ministries, and the Women’s Business Development Center, along with the three pilot partners, Greater Englewood CDC, the Resurrection Project, and Chatham Business Association in counseling small businesses through the lending process and matching them to available sources of capital.
“VEDC has been the lender of last resort for many good companies that have struggled during the economic downturn and recovery,” said Roberto Barragan, President and CEO of VEDC. "The Chicagoland Business Opportunity Fund was created to bring an innovative and affordable source of alternative financing to Chicago entrepreneurs through a variety of loan programs.”
"Strong communities require strategic partnerships. This program demonstrates how our City has made crucial steps towards efficiency and effectiveness. This is a historic moment for the Woodlawn neighborhood and would not have happened without the Mayor's strong leadership," said Alderman Willie B. Cochran (20th).
The announcement coincides with the Chicago Microlending Institute (CMI), recently awarding its 200th microloan. In 2012, Mayor Emanuel launched the Chicago Microlending Institute with $1 million to help businesses access loans up to $25,000. In 2014, the Mayor and the City Treasurer invested an additional $1 million to provide critical loans that would help support roughly 300 new businesses by 2016 and ensure that the CMI program can be self-funding through 2016.
The CMI revolving loan fund now has loans totaling approximately $2 million, which has supported close to 200 businesses and has helped create or save 817 jobs across the City of Chicago. A map of every loan is available on the Chicago Data portal at https://data.cityofchicago.org/Community-Economic-Development/Chicago-Microlending-Institute-CMI-Microloans-Map-/shij-ziua.
The announcement was made at one of the new Centers with Sunshine Gospel Ministries in Woodlawn at Greenline Coffee. Twelve Chicago families invested $150,000 to start the coffee shop that employs 10 staff, all of whom live in Woodlawn. This is an example of the type of neighborhood-focused small business supported by microloans and with community investment.
"The work that is being done with small businesses through the micro loan program makes us more effective as a City. When the private sector, non-profits, and government work together, we all win," said Alderman Mary O'Connor (41st), Member of the Small Business Advisory Committee.
“Small businesses are the lifeblood of our neighborhoods and the primary source of jobs. Access to capital is essential for small business development, cash flow and growth. The Chicago Microlending Institute fills this necessary link to capital and I applaud the expansion of lending centers into new communities across our City,” said Alderman Tom Tunney (44th), Chair of the Committee on Economic, Capital, and Technology Development.
Since Mayor Emanuel announced the Capital Access Center pilot program (now the Small Business Opportunity Center Program) in October 2014 to help prepare and connect small businesses to capital, over 60 businesses have been served, 15 of which were steered toward entrepreneurship programs or credit repair specialists. The partners also helped 13 businesses apply for loans - three have been approved and ten are currently pending approval.
Since 2011, Mayor Emanuel has instituted a number of reforms to help support small business growth and entrepreneurship in the City of Chicago. In April 2013, Mayor Emanuel launched the Department of Business Affairs and Consumer Protection’s Small Business Center (SBC), to provide a one-stop-shop for small businesses. The SBC has reduced overall wait times by fifty percent and 25 percent of all customers are in and out of the Center within 15 minutes. Interested businesses can visit the City’s Small Business Center online at www.cityofchicago.org/sbc.
“After meeting with small business owners in each of Chicago's 77 communities, I know first-hand that their top priority is gaining greater access to capital,” said City Treasurer Kurt Summers. “This expansion will meet those needs while stimulating economic growth in our neighborhoods. I am committed to working with Mayor Emanuel to help in this process and ensure our small businesses are connected to the capital they need to flourish.”
And earlier this month, Mayor Emanuel announced an expansion of the Chicago Anchors for a Strong Economy (CASE) program to encourage Chicago’s leading institutions to support local small businesses growth in their neighborhoods. Over the last year, the small businesses that participated in the CASE program saw an average increase in revenue of $804,000. CASE has the potential to drive up to $80 million in additional revenue to neighborhood small businesses and create nearly 250 full-time and 125 part-time jobs annually. The expansion will increase the number of committed institutions from 11 to at least 20 and double the number of small businesses helped.