Emanuel proposes new lending program for small businesses
Chicago Mayor Rahm Emanuel wants aldermen to approve a new organization aimed at helping small businesses.
On Tuesday, the mayor unveiled his plans for the Chicago Microlending Institute, which he says will train potential lenders on how to advise and give loans to people starting small businesses. The proposed institute will be run by ACCION Chicago, an area small business lender. Emanuel said ACCION will administer grants from a $1 million loan pool funded by the city to small business owners.
The lender training program will also be run by ACCION and cost $245,000, funded by third-party grants. Citibank is also contributing $100,000 to help set up the institute.
Emanuel said small loan institutions are important, because small businesses sometimes struggle to get traditional loans from banks.
"That's the hardest first step, that's the hardest loan," said Emanuel. "You don't have a proven model. You don't have a proven record. You don't have credit that they can look at. That's what makes microlending a unique space to operate in."
Jonathan Brereton, ACCION's executive directors, said the organization's average small business loan is $7,500.
Emanuel's proposal still needs City Council approval.