$4.6 Million in Micro Loans and Support to Fill Macro Need Among Greater Cleveland Small Businesses
CLEVELAND –To create a new ecosystem of support for local neighborhood businesses, an impressive public-private partnership has developed between 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. The partners have pooled $4.6 million in resources – $4 million to fund micro loans and another $600,000 to provide training and technical assistance – for small businesses in Greater Cleveland. The partners will be coordinating with the Economic and Community Development Institute, which will officially launch its Cleveland operation with the public announcement of this program on Tuesday, July 17.
A microenterprise is generally defined as an owner-operated business with five employees or less, which can be capitalized with less than $50,000. The local need for micro loans for these businesses was confirmed in a 2011 study by Friedman Associates, a national firm specializing in microfinance. The report on the microcredit landscape in Cuyahoga County estimated an unmet need of $38 million for loans under $50,000, with the greatest gap among minority-owned businesses. ECDI runs a widely-respected microlending program in Columbus that targets underserved populations that do not meet the credit or collateral requirements necessary to access traditional financial services. Since 2004, ECDI has made $11.4 million in loans to 700 small businesses, creating or retaining 1,955 jobs. ECDI is the seventh largest U.S. Small Business Administration Intermediary Microlender in the nation.
“At Huntington, growing local businesses is not just the right thing to do, it is the best thing we do,” said Daniel P. Walsh, Northeast Ohio president, Huntington Bank. “As the number one SBA lender in Greater Cleveland, partnering with organizations like ECDI is natural for our bankers who work hard to ensure that our neighborhood businesses have the resources, expertise and encouragement to thrive in our hometown. ECDI provides an exciting way for our neighborhood businesses to grow. I am pleased to announce that Huntington is providing two million dollars in financing to support this dynamic partnership.”
ECDI has already begun its local outreach and has established referral and training relationships with Cleveland-based nonprofits such as the Cleveland Neighborhood Development Coalition, JumpStart, Global Cleveland, Bad Girl Ventures, and the Hispanic Business Center. The first eight local loans made by ECDI to date total $163,000.