Crain’s Detroit Business
Sept. 6, 2022
Jay Davis
A Detroit-based organization led by an all-Black executive team has established a fund to assist Black business owners who otherwise might not seek funding to scale their businesses.
Black Leaders Detroit in January implemented a no-interest loan program with a goal of distributing $500,000 in loan funds in 2022, with a maximum award of $20,000. The group, led by Chief Executive Officer and Co-Founder Dwan Dandridge, and Chief Operating Officer and Co-Founder Kevin Elkins, through two funding cycles, has distributed $250,000 in loans to 17 black-owned businesses ranging from barber shops and bakeries to construction and moving companies. Loans will be awarded each quarter. Applications are open throughout January, April, July and October. Funds are distributed in April, July, October and January of the following year.
The need for the funds is there. In the first three months of the program, Black Leaders Detroit received 212 loan applications totaling $2.2 million in loans, according to Dandridge.
“We’re seeing a lot of people apply with us who wouldn’t go other places,” Dandridge said. “Concerns for Black business owners often center on why they get denied by a conventional lender. Is it because they’re not qualified, or is the funding just not there for them? With (Black Leaders Detroit), that Blackness won’t work against them.”
Established in 2019, Black Leaders Detroit works, through grants and loans, to provide Black business owners with access to capital and eliminate an equity gap. A study of Federal Reserve data found that Black and other minority business owners are far less likely to receive the necessary funding to operate a business and that the average loan for a white-owned small business is about $30,000 higher than a BIPOC company.
The loan program has been in the works since the establishment of the organization, which through various programs has distributed $733,000 to 167 Black-led businesses and organizations. About 60 percent of those businesses are run by Black women.
Black Leaders Detroit has put in a lot of work to get its message to as many people as possible. The group has set up a challenge looking for 1 million people to contribute $1 a week to help elevate Detroit’s Black business owners. Dandridge on multiple occasions has ridden a bike from Detroit to Mackinac Island to raise funds for Black Leaders Detroit.
The loan program will no doubt increase that figure and help many more business owners, Dandridge said.
The no-interest loans include no hidden fees, with awardees having three years to repay the funds, and a 60-day grace period before the first monthly payment is due. For approval, each business must be located in Detroit and majority Black-owned. Potential awardees must be registered with the state department of licensing and regulatory affairs, and have been in operation for at least one year. Approved applicants must have either a co-signer, collateral or show receivables to get the funding. Applicants requesting more than $10,000 are interviewed by the Black Leaders Detroit funding board, while those seeking less than $9,000 meet with a group of Black Leaders Detroit staff. Loans are handled by Black Leaders Detroit loan officer Kevin Taylor. Businesses not approved for funds are referred to technical assistance providers for assistance before reapplying.
The goal of Black Leaders Detroit is to eventually be able to fund every loan application, Dandridge said. The plan also calls for the maximum loan amount to increase to $50,000 in 2023.
“We want all of the loan applications to meet our criteria,” Dandridge said. “This is our pilot year. I don’t see things going anywhere but up.”
