A couple of years ago, Capri Scott was ready for a change.
The Detroiter had spent 15 years teaching in the Detroit Public Schools Community District, but dreamed of opening her own child care center.
So, in June 2021, she left her teaching job with the goal of opening her own child care center that September. She knew elementary school-aged children were falling behind in literacy and said she wanted to open a place that prepared them for kindergarten and first grade.
“I was determined,” Scott, 58, told BridgeDetroit. “I mean, I had roadblocks that were trying to come, but I kept pressing forward.”
One of those roadblocks was securing a location. Scott said she was initially going to operate in an empty space inside Old Redford Academy Elementary School on Detroit’s west side, but those plans fell through. By that time, Scott had used up almost all of her savings to buy supplies and furniture. She turned to financial nonprofit Michigan Women Forward (MWF) and was granted a $50,000 loan.
Scott found another site for her center at 18310 Livernois and opened Foundation First Childcare Development Center in September 2021.
MWF is now working on some new ways to help other women and people of color who want to start their own businesses. The community development financial institution, dedicated to expanding economic opportunity for women and entrepreneurs of color, recently launched the Michigan Economic Opportunity Fund. The microloan program was created for entrepreneurs who don’t qualify for traditional loans through banks or other financial institutions.
The $10 million initiative is funded with a $1.5 million investment from Huntington National Bank, a $1.5 million grant from Ballmer Group, $1.4 million in State Small Business Credit Initiative (SSBCI) loan participation, and a $1 million grant from the Michigan Economic Development Corporation (MEDC), according to a news release. An additional $2 million from other private funders is expected to be announced later this year.
“Michigan (Women) Forward…I praise them because they were the reason I was able to go ahead and complete what I had started to open up,” Scott said.
Closing the gap on access to capital
Alexis Dishman, MWF’s chief lending officer, said the organization wanted to create a fund specifically for women and entrepreneurs of color because there’s a substantial gap in the access to capital for those groups.
“It can be a barrier when you’re starting a business or it can even be a barrier when you’re trying to grow an existing business,” she said. “Credit score can be a factor and also not having financial statements to provide to whatever organization you’re trying to get funding from.”
According to a 2021 report from the U.S. Chamber of Commerce, Black Americans hold only one-tenth the wealth of white Americans, and often hold higher levels of debt. This makes access to capital difficult, leaving 76% of Black entrepreneurs to rely on personal and family savings for financing. In addition, Black-owned non-employer businesses are half as likely to get bank financing compared to their white counterparts.
Meanwhile, almost 60% of women entrepreneurs say they do not have the same access to capital as their male counterparts, and nearly a quarter believe women will never have equal access to capital, stated a 2019 Bank of America report.
MWF will manage the fund by processing applications that come through its website, along with referrals made by its banking institution partners. Huntington will provide an additional pool of applicants through its Lift Local Business program which supports minority, women and veteran-owned small businesses.
Entrepreneurs will be able to apply for up to $50,000 in loans through the Michigan Economic Opportunity Fund. An average loan from MWF is around $25,000, so the fund is anticipated to help around 400 entrepreneurs.
People can apply for a loan by visiting miwf.org. All applicants must submit an application, as well as demographic information, personal financial statements, business plans with projections and other supporting documentation. Questions about the program can be emailed to microloan@miwf.org or by calling (313) 962-1920.
As of Friday, MWF has received 38 applications, Dishman said.
The lending officer said she hopes the fund will provide more access to capital for Detroit entrepreneurs and to other lower income cities across the state.
“This is an important milestone for our state in terms of seeing private philanthropy dollars, state government all come together to support growth in the micro enterprise portion, small businesses in our state,” she said.
I would like to wish Capri Scott the very best of everything as she moves forward towards her goal of opening her own child care center. God Bless Always!