Lender receives $500K to help small businesses
Northern Initiatives will use grant to expand portal and technical assistance for customers.
Diverse small business loan customers in West Michigan will get a leg up from their lender this year, thanks to a $500,000 grant.
Marquette-based Northern Initiatives received $500,000 from the Wells Fargo Works for Small Business: Diverse Community Capital (DCC) program, which offers capital and technical assistance to minority-owned small businesses through Community Development Financial Institutions (CDFIs).
Northern Initiatives is a nonprofit CDFI that so far has loaned about $2.5 million total to over 24 West Michigan-based minority-owned small businesses.
Among those are Reliable Medical Transport and Forty Acres Soul Kitchen in Grand Rapids; Piggy Polish, a “healthy” nail polish remover startup in Grand Haven; and Nipote’s Italian Kitchen in Muskegon, according to Dennis West, president of Northern Initiatives.
Northern Initiatives and Wells Fargo hosted an event to announce the DCC grant to the nonprofit on Oct. 10 at Reliable Medical Transport.
Charles Lott, senior vice president of commercial banking for Wells Fargo, said Northern Initiatives earned the grant by demonstrating its deep commitment to the underserved small business community.
“Together, we can help more diverse entrepreneurs reach their full potential and stimulate job creation in the process,” Lott said. “We’ve learned that working with CDFIs is an effective way to try new things, help remove barriers and put more small businesses on a path to financial success.”
West called the grant from Wells Fargo a “significant investment.”
“This … is vital to our ability to position diverse small business owners to successfully launch and grow,” West said.
He said the grant will enable Northern Initiatives to enhance its online customer portal, Initiate, and improve technical assistance delivery to customers.
Every Northern Initiatives loan customer has access to Initiate’s tools, resources, videos and webinars to help them grow their business. West said Northern Initiatives will begin developing additional materials for the platform “to support diverse audiences.” This will include the remaking of existing English-language videos for Spanish-speaking users and translation of the portal into Spanish.
Northern Initiatives also plans to expand its licensing of the portal to other CDFIs, microlenders and small business support organizations.
Natasha Koss, development coordinator with Northern Initiatives, said the licensing cost for Initiate currently is $20,000 a year. Because that sum can be prohibitive, Northern Initiatives will use part of the Wells Fargo grant to create “Initiate Lite,” a scaled-back version for organizations on a tight budget, she said.
Currently, nine CDFIs license Initiate across a 32-state footprint. West estimates the platform has reached 2,500 to 3,000 small businesses across the U.S. so far.
Koss said the “technical assistance” component the grant will be used for includes educating customers in money, marketing and management concepts. Examples could range from helping a business owner set up QuickBooks to consulting on a marketing plan.
Northern Initiatives provides loans — typically in the range of $250,000 and under — to small business owners, entrepreneurs and community organizations that might not qualify for loans from traditional lenders for a variety of reasons.
Its focus is on providing loans based on “character and cashflow” to low-income, disadvantaged and diverse communities that can be “challenged by underwriting blemishes,” West said.
Koss added ethnic, racial and gender diversity of applicants are important factors, as well as military service.
About one-third of the CDFI’s borrowers are startups.
Northern Initiatives has a variety of loan funds West Michigan small businesses can access through Grand Rapids Community Foundation, Community Foundation for Muskegon County, Fremont Area Community Foundation, Huntington Bank, Michigan Good Food Fund and Sustainable Communities Fund.
Loan applications and more information about Northern Initiatives are available at bit.ly/applysmallbizloan.