Several Cleveland-based funding organizations have gotten together and pooled their money to help small businesses that otherwise would not have access to the capital they need to grow.
Under the Economic Community Development Institute
(EDCI), which officially announced the launch of its Cleveland office on July 17, the City of Cleveland
, Cuyahoga County
, Huntington Bank
, U.S. Small Business Administration
, Commission on Economic Inclusion
, The Business of Good Foundation
, and the Cleveland Foundation
have committed $4.6 million in resources.
Micro-loans will account for $4 million of the fund while the remaining $600,000 will provide training and technical assistance for Cleveland small businesses. A 2011 study by Friedman Associates
, a national firm specializing in microfinance, estimated a need of $38 million for loans under $50,000 in Cuyahoga County, with the greatest gap among minority-owned businesses.
“Neighborhood businesses who would not otherwise have access to capital will benefit from these loans,” says Daniel P. Walsh, Huntington northeast Ohio president. “These loans really stabilize neighborhoods with the capital to achieve the American dream. It will reinvigorate those neighborhoods that need reinvestment.”
The average loan is between $15,000 and $20,000. Eight area businesses have already benefited from loans through the program, totaling $163,000. ECDI started a similar program in Columbus in 2004 and has made $11.4 million in loans to 700 small businesses, creating or retaining 1,955 jobs.
The majority of businesses who will benefit from the loans are five employees or fewer, explains Bob Eckardt, executive vice president of the Cleveland Foundation. “There’s a pretty significant gap in this community and this will support a wide range of businesses,” he says. “We’re trying to do a big-picture thing. It’s important to support the entrepreneurs by getting them the funding they need to grow big or hire employees.”
Source: Daniel P. Walsh, Bob Eckardt
Writer: Karin Connelly