Petition for The American Recovery Plan Act (ARPA) Funds For Black Businesses To Be Managed By Black Leaders Detroit
The city of Detroit received $826M from The American Rescue Plan Act (ARPA), of which $40M was allocated for small businesses. To ensure Black-led businesses have equitable access to these funds, Black Leaders Detroit (BLD) requests to manage $2.5M as part of our no-interest loan program.
Last year, in our first full year of operation, BLD gave $218,700 in micro-grants to 62 businesses affected by Covid-19. When combating the health impact of the pandemic, the country gave the most focus to those with pre-existing conditions. But when it came to battling the effect on the health of small businesses, the country did the opposite.
In the Black small business community, the lack of access to capital and a history of discriminatory lending practices from many traditional financial institutions ARE the pre-existing conditions.
A survey conducted by the New Economy Initiative (NEI) found that 40% of Black-led businesses saw a 60+% decline in revenue since the beginning of the pandemic. That decline, coupled with long-held beliefs by banks and other lending sources that Black entrepreneurs are higher-risk candidates for loans, makes it almost impossible for Black small businesses to bounce back.
BLD believes nothing is impossible.
We are a funding vehicle for Black-led businesses in Detroit. In the city, 80% of businesses are Black-owned and, of that number, 80% are micro businesses with annual revenue of less than $250,000. Beginning in January, BLD will offer no-interest loans to qualifying Black-led businesses in the city of Detroit. We have worked with Hebrew Free Loans, which has run a thriving no-interest loan product for 126 years, to finalize our program.
At BLD, we genuinely believe providing monetary support to local businesses can play a considerable part in diminishing the economic and social disparities that exist in Detroit by creating more opportunities for self-determination, employment, and financial stability. The tangible effect dispersing 2.5M in loans from ARPA will have on the health and livelihoods of small, Black-led businesses and the community at large cannot be overstated.
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