New $40 million fund hopes to support small business owners in Charlotte
A new multi-million dollar fund created to increase access to capital for local business owners is now available in Charlotte. The Charlotte Small Business Growth Fund is one of the largest non-pandemic funding opportunities in the city. Through fixed-interest-rate loans, it aims to invest $40 million in more than 2,000 local businesses over the next years.
Supporting Small Businesses in Charlotte
Small businesses, including Black-owned and woman-owned businesses, will have the opportunity to access capital to support their everyday operations. The fund is part of Mayor Vi Lyles’ Racial Equity Initiative, which provides equitable access and opportunities for Charlotte’s communities of color. According to the CLT Alliance Foundation, the fund expects 70% of its loans to benefit entrepreneurs of color.
Addressing Historical Challenges
Business owners of color, particularly Black people, have historically experienced difficulty accessing capital. According to a survey by Intuit Quickbooks, 57% of Black business owners were denied bank loans at least once.
Opportunities for Growth
Loans will be available through community development financial institutions (CDFIs) dedicated to supporting underrepresented small business, the CLT Alliance Foundation said. Lack of capital is one of the leading challenges for local Black-owned businesses.
The fund’s hope is that it will have a significant impact by providing an alternative to securing business loans without directly applying to a traditional bank. Eligible businesses must be located in Charlotte and require a minimum FICO score of 575 or no established credit. To apply, business owners submit an application to the Charlotte Small Business Growth Fund and are then paired with a lender.
Loan Details and Benefits
Entrepreneurs can receive loans ranging from $1,000 to $250,000, with most repayment plans lasting around four years at a fixed interest rate between 9% and 12%. Loans can be used to help businesses pay for marketing, necessary equipment, supplies, payroll, rent, and other expenses. In addition to loans, resources like business coaching and budget planning will also be provided at no cost.
Impact on Local Business Owners
The fund is a breath of fresh air for business owners like Isis Bey, owner of Harmony Health Therapeutic Services and IAB Consulting, and Ammalu Saleh, owner of Serengeti Kitchen. Each described how the fund can help them overcome the challenges they face in business.
“Because [Harmony Health Therapeutic Services is] a small business, we truly depend on fee for service or insurance reimbursements which get held up and they put us behind,” Bey said. “There have been many times through the years that I didn’t know if I would make payroll, not because we don’t have sound business practices but because we haven’t been paid.”
Saleh said she believes that the loan will help her emerging business by finding a permanent location. “The challenge I have been facing since the day I started has been getting the capital to get my own space,” Saleh said. She currently leases a space at the Market at 7th Street, but purchasing her own location, she said, will cost between $6,000 and $7,000 per month.
Around 5.3% of businesses in the city of Charlotte are Black-owned, but with options like the Charlotte Small Business Growth Fund to help overcome financial barriers, the number could rise.
