Last updated on October 18th, 2021 at 12:36 pm
The PNC Foundation has pledged $600,000 to launch a new fund in support of Black entrepreneurs and business owners in the city of Milwaukee.
The new Black Business Boost Fund is designed to expand access to capital and provide more resources for small businesses in Milwaukee’s disinvested communities. The fund will be administered by Wisconsin Women’s Business Initiative Corp., which will partner with the Housing Authority of the City of Milwaukee to provide technical assistance and educational and mentoring opportunities for Black entrepreneurs.
Support will come in the form of direct equity investments and working capital for Black-owned businesses, business education classes and workshops provided by WWBIC, credit recovery assistance, and access to co-working spaces and incubation programs.
The announcement follows Pittsburgh-based PNC Bank’s commitment in June 2020 to dedicate $1 billion to address systemic racism and support the economic empowerment of Black Americans and low- and moderate-income communities nationally. The bank said it has so far invested $27 million in underserved communities in Wisconsin this year.
Of PNC’s initial commitment to the Black Business Boost Fund, $250,000 will be designated for equity investments to help Milwaukee-based Black-owned businesses get started or take their next growth step. The foundation expects to support 100 businesses over the next three years with resources and “friend- and family-type capital,” said Chris Hermann, regional president for PNC Bank in Wisconsin.
“We believe this alignment between the public and private sector creates economic vitality in areas of Milwaukee that could benefit from it the most,” he said. “We’d love to see this program grow.”
Wendy Baumann, president and chief visionary officer of WWBIC, said the support will help address a funding challenge that is common among the organization’s clients, 60% of whom are from low-to-moderate wealth households.
“Individuals come to us and sometimes they have their sweat equity, they know that they have a business plan, they have an idea, … but they don’t necessarily have their own capital to put into the deal,” Baumann said. “Banks require it. WWBIC likes to see some skin in the game. So, we have a quarter-million (dollars) through initial PNC support to put in a piece of equity so WWBIC can get to a ‘yes’ on the deal.”
Baumann implored more funders to join the effort.
“Funders that are out there, let’s add a zero to that initial quarter of a million dollars from PNC,” she said.
Profits from the investment will be reinvested into succeeding program cohorts and to help expand the program’s reach, the PNC Foundation said.
WWBIC said “patient and flexible” repayment terms will allow entrepreneurs time to develop, grow and scale their business. No payment will be required for the first two years, followed by an additional year of priority returns only. After the third investment year, the business owner will have the option of paying off the investment or converting it to a traditional amortizing loan.
Common Council president Cavalier Johnson applauded the new program.
“This investment will serve as another step forward in closing the equity gaps that exist in our city, and help Black entrepreneurs and business owners create wealth, which in turn supports those businesses, creates job access and uplifts neighborhoods, among other benefits,” he said.
The new investment comes on the heels of an announcement earlier this week from the Metropolitan Milwaukee Association of Commerce that it plans to invest $500,000 over the next two years to bring more attention and support for the region’s startup and entrepreneurship scene. Tim Sheehy, president of the MMAC, said the effort ties into the chamber’s larger Region of Choice initiative aimed at addressing economic disparities among Black and brown residents of the metro area.
“This is clearly an area where developing more diverse investors as well as growing more diverse companies is going to be an important aspect for us to tap the talent pool that’s here, so that’s certainly going to be central to this effort,” Sheehy said.
Interested entrepreneurs and business owners can register for the Black Business Boost Fund via WWBIC’s website.