$5 million investment helps connect small businesses with financing and education
As Laura Mitchell of Luxury Cake Company in Chicago prepared to expand her small business, she faced a less-than-sweet dilemma: Business was growing, but taking on larger clients required a substantial financial investment in a professional grade oven and refrigerator.
Mitchell secured a $7,500 small business loan from Fifth Third Bank and a community partner, enabling her to expand her service offerings and build a showroom for cake tastings and demonstrations.
“You can do the hard work, but at a certain point, you need some help. It doesn’t take a million dollars to make your dreams a reality,” she said. “For businesses like mine, a small loan is all it takes to maximize growth.”
But a success story like Mitchell’s isn’t always the result of a loan application. In fact, U.S. Small Business Administration data shows that only a fraction of small business loans went to minority- (26 percent) or women-owned businesses (18 percent) in 2017.
This Small Business Week, Fifth Third is taking a stand against this lending gap with a $5 million investment to the nonprofit Community Reinvestment Fund, USA (CRF). The partnership expands access to capital for small businesses in major markets across the U.S., including Cincinnati, Chicago, Cleveland, Detroit, Indianapolis, Tampa, Orlando and Charlotte. CRF works with community partners to improve access to capital for small businesses in underserved communities as well as those owned by women and minorities.
“Entrepreneurs like Laura Mitchell help our cities thrive,” said Kala Gibson, head of business banking for Fifth Third. “We have a long way to go to close the lending gap entirely, but this investment will help a more diverse range of small businesses reach their full potential, add jobs and give back to the communities that support them.”
In addition to expanding the responsible lending options available to small business owners, the $5 million investment will help small business owners make informed lending decisions using tools like CRF’s new platform, Connect2Capital, a “one-stop shop” for comparing a broad range of responsible and transparent loan options.
Many of the community partners will also:
- Educate current and prospective entrepreneurs on critical financial management skills, including cash flow analysis, credit management, loan applications and more.
- Connect business owners with local opportunities for continued education, including hands-on workshops, classes and webinars on topics ranging from credit repair, financial management and building a better business plan.
According to Gibson, the multimillion-dollar investment is part of the regional bank’s strategic plan to increase access to traditional funding, an effort that has made notable strides in recent years. The Bank has pledged $10 billion to small business loans through 2020 as part of its Community Commitment. The Bank has earned recognition from Greenwich Associates as one of the “best brands” in small business banking and from the State Small Business Credit Initiative as the largest lender by dollar amount.
“Whether we’re working with a one-person startup or a corporation that brings in more than $20 million a year, one of the most rewarding parts of our job is helping a business find the funding to reach its full potential,” Gibson said. “We are invested in them. When they grow, we grow, and we celebrate together.”
For business owners like Laura Mitchell, it’s that level of individual investment that helps dreams grow into an even sweeter reality.