A new program administered by the Urban League of Greater Madison (ULGM) and funded by American Family Insurance will provide loans to new and emerging minority-owned businesses located in Madison’s new South Side hub, according to a press release issued Thursday.
The economic development project announced in July is being developed along Madison’s South Park Street corridor under the direction of ULGM CEO and President Dr. Ruben L. Anthony, Jr., and in partnership with a group of stakeholders including the Madison Black Chamber of Commerce, city and county government leaders, and other neighborhood stakeholders. The project arose out of more than two years of community engagement that involved hundreds of South Madison residents, non-profit agencies, elected officials, business leaders and many others.
An investment of $400,000 to launch the program will be provided through the American Family Insurance Institute for Corporate and Social Impact. This will include $150,000 to design and staff the program, and $250,000 to seed the loan fund. The Institute partners with numerous public and private organizations to invest in programs that address societal issues and help close equity gaps.
The ULGM aims to grow the fund to at least $1 million by June 30, and begin making a mix of loans and grants to a variety of new or early-stage “main street” minority-owned businesses, such as retail, restaurants and services, for location in the South Side hub. Businesses will meet certain criteria, such as limited revenue or customer traction. Loans averaging $20,000 each will be made available to businesses at low interest rates with no collateral required.
“The hub is envisioned to be a vibrant commercial destination space in the Park Street corridor where black-owned businesses can thrive and build a legacy,” Anthony said in a statement. “This investment from American Family Insurance will jumpstart a much-needed business readiness program so we have a full pipeline of entrepreneurs ready when the hub opens in 2022.”
In addition to funding, businesses will have access to a full complement of intensive technical assistance, including individualized coaching to develop strategic business plans, connections to other business support resources, mentorship and access to a network of culturally competent business experts.
“We want to give entrepreneurs of color the capital they need to lift their businesses to the next level and position them for success,” Nyra Jordan, American Family social impact investment director, said in a statement. “We believe this replenishing financing pool, combined with guidance and support through the hub, is an investment that will contribute to business growth in the South Side community, create jobs and drive further economic opportunity and development.”
The South Side hub project will be modeled after Sherman Phoenix, an entrepreneurial hub in the Sherman Park neighborhood of Milwaukee and also supported by American Family, where space and programming is provided for small businesses of color as well as community and cultural events.
This community investment partnership is part of the Free to Dream initiative announced earlier this week. American Family has pledged $105 million over the next five years to close racial equity gaps and effect social impact and positive change in communities across the country. Free to Dream focuses investments on five societal issues: Economic empowerment; education and health equity; climate resilience; criminal justice reform; and workforce diversity, equity and inclusion.