Through philanthropic investment, an organization based on Milwaukee’s south side is expanding its ability to provide financial capital to small businesses. The Latino Chamber of Commerce of Southeastern Wisconsin, with support from the Greater Milwaukee Foundation, recently launched the Empowerment Fund to help local businesses grow and thrive while avoiding the risk of predatory lending practices.
“This is a unique project for us as part of our mission is to ensure entrepreneurs can access competitively priced capital,” said Nelson Soler, president of the Latino Chamber of Southeastern Wisconsin.
Since it began its alternative lending program, the chamber has provided more than $2.1 million in loans and grants to businesses across southeastern Wisconsin, with a focus on Latino-owned businesses. Through advocacy, education and support, the chamber empowers Latino and emerging entrepreneurs with an overarching goal of strengthening the region’s economic vitality.
The Foundation is the Empowerment Fund’s lead funder. This work is a part of the Foundation’s overall impact investing strategy, which supports businesses, developments, projects and entrepreneurs with loans that are recycled back into the community as dollars are returned.
“The investment aligns with our equitable economic opportunity strategy to provide access to local businesses that are having a tough time receiving capital on the traditional path,” Kermiath McClendon, the Foundation’s impact investing manager, said. “It will also help us drive more capital investments in the south side neighbors and in the Hispanic community.”
How it works
The goal is to help entrepreneurs avoid predatory lenders who offer quick access to capital to businesses with high-interest rates and fees. These practices often target businesses with limited or no funding with little regard for a business’s long-term health.
“We understand the significant challenges that predatory lending poses to small businesses, especially within the Latino community,” Soler said. “The Empowerment Fund is a crucial step in leveling the playing field and ensuring that our local entrepreneurs have the opportunity to succeed.”
Eligible businesses will be able to seek loans between $5,000 and $25,000. In addition to financial assistance, borrowers will receive financial coaching and educational workshops, support in restructuring existing debt and improving credit scores, and networking opportunities.
Supporting small businesses, strengthening Milwaukee
The Foundation is committed to strengthening its relationship with Milwaukee’s south side and Latino/a communities through investment and partnership. Since 2020 alone, the Foundation has awarded nearly $20 million in grants to nonprofits based in greater south side neighborhoods, including more than $11 million in the near south side. Supporting the Empowerment Fund adds a new dimension through investment in the for-profit sector.
Civic and community leaders from the south side have expressed the desire for the Foundation to deepen its commitments, according to Ian Bautista, Foundation senior director of civic engagement.
“This fund represents an opportunity for the Foundation to take a step in that direction in response to the great opportunities for growing Milwaukee’s economy by harnessing the energy and hard work of small businesses on the south side and elsewhere led by Latino/a entrepreneurs,” he said.