Generational Wealth and A Voice for Change

The concept that this pilot is addressing is the lack of available (emergency) funds for small businesses. In day-to-day operations, there is always the possibility of an emergency. The utilities may go out, a piece of equipment may break down or need servicing or an employee may call in sick, leaving the business shorthanded. These are examples of situations where traditional lending and financial institutions are not responsive or are non-existent to service the needs of BIPOC businesses. No business owner wants to incur debt (loans) for such emergencies and at the same time, no traditional lending organization wants to take the time to create the paperwork, etc for small loan amounts that will not generate substantial profit over time. 

The Central Area Collaborative (CAC), as an already trusted public steward of funds, operating as a community service non-profit organization, proposes that a percentage of any federal, state, and local funding that is earmarked for CDFI’s and other non-traditional lenders be apportioned to the CAC as the community steward of funds that can be used to remedy the situations listed above. The CAC also proposes that this issue can also be addressed as a tax levy for property owners in particular neighborhoods that are already identified as high-risk/high-displacement. There is a possibility of creating excess levy funding or general obligation bonds, specifically to address the need for emergency capital for small BIPOC businesses, managed and maintained by a community service organization. 

A consortium of three to five businesses within the Central Area will serve as a working/guiding body determining how small businesses should approach the financial holding organization (CAC) when emergencies or other incidents occur. This consortium will also look at creating “rules” and conditions that make requests of the CAC appropriate. This consortium will also look at ways for a borrowing/receiving business to make restitution or pay back any funds received. The goal is to show that “paying back” a loan/grant can take many forms. There can be goodwill, as well as donations of goods/services that can serve as repayment vehicles. The objective of this group is to create non-traditional qualifying metrics for receiving and paying back any funds by the business(es).