Enterprise Center introduces new $500,000 loan pool for minority businesses
The Enterprise Center has announced that it will be launching a new $500,000 fund aimed at supporting minority businesses that lack the assets necessary to secure loans for property purchases.
The organization, in conjunction with The Enterprise Center Capital Corporation, expects that the Due Diligence Revolving Advance Pool will be a boon for minority business owners looking to expand their asset base in order to acquire greater amounts of capital.
“Minority business owners face numerous barriers in accessing the capital they need to support and grow their business. Due diligence expenses like property appraisals, background checks, earnings reports, and legal fees can be absolutely devastating to a small business owner attempting to secure a major capital investment,” said Della Clark, president and CEO of The Enterprise Center.
“Our new Advance Pool will provide favorable short-term financing that will ultimately lower the risk for both the business owner and capital provider. We believe the Advance Pool will reduce barriers to investment and reduce the incidence of broken deals for minority owned businesses.”
The goal of the fund is to help Minority Business Entities (MBE) pay for their due diligence expenses by “advancing funds to them on favorable terms” in order to “address a critical phase that often stalls major capital investment in MBEs.”
In order to be eligible for the fund, interested businesses must meet the following criteria:
- Must be a for-profit business enterprise “in which at least many of its voting securities or equity economic interests are owned by one or more minority groups”
- Must be past the ideation stage and must be receiving $500,000 in recurring revenue on a trailing 12 month basis
- Must have at least 2 full-time employees who have been employed for at least 6 months
- Must have an investor pipeline or have found a lending source
“When you think about many small businesses in Philadelphia, particularly Black and brown, whether they are on a commercial corridor, they’re operating in rented space, or various different scenarios, if they do not own assets, then they can’t go to banks to borrow very much money because banks are asset based lenders. So the lower your assets, typically the less money you can receive. So what we want to do is have more minorities in the city of Philadelphia own where they operate. This is to really help you build assets and to be able to attract investment capital,” said Clark.