Durbin Advocates Micro-Financing for Growing Small Businesses in Illinois
By Ellen Cannon
Illinois Senator Dick Durbin (D), Assistant Majority Leader of the Senate, and Chairman of the Financial Services and General Government Appropriations Subcommittee, (FSGG), said yesterday, “Small businesses are the engine of this economy and the key to recovery.” According to Durbin, the problem of securing loans for potentially high quality small businesses from traditional lenders remains a challenge. One solution for getting this entrepreneurial and job promoting engine going according to Durbin is to increase the support from microlending programs that are willing to provide the necessary seed money for underserved projects who do not have access to traditional lenders.
Yesterday Senator Durbin expanded on the critical need to increase the capacity of microlending activity in Illinois during his meeting with officials from ACCION, Chicago’s largest microlender, and the owners of Gourmet Gorilla, an organic school lunch catering company that is one of ACCION’s significant borrowers.
Senator Durbin underscored his call for increased federal funding for microlending companies yesterday, who are committed to the growth of small businesses which in turn will hire workers from Illinois.
Durbin has already secured $25 million for microlending and $20 million for technical assistance grants to support microborrowers through the Small Business Administration (SBA) in the Fiscal Year of 2012 omnibus appropriation bill enacted last month. According to Senator Durbin’s office, “As a result of increased federal funding ACCION now has the capacity to double its maximum loan amount in 2012 from $25,000 to $50,000.”(www.durbin.senate.gov1/11/2012)
Chicago Mayor Rahm Emanuel is highly supportive of microlending for Chicago. In December, mayor Emanuel announced the formation of the Chicago Microlending Institute (CMI), which is the first-in-the-nation institute that will train new leaders to make targeted loans to Chicago’s smallest businesses. The CMI will administer the Small Business Loan Fund, a $1 million pool of loan capital that is aimed at supporting the smallest businesses in Chicago with targeted microlending.
Echoing the words of Senator Durbin, Mayor Emanuel said, “Small businesses are the backbone of Chicago’s economy. We must do everything we can to make sure our small businesses have resources and opportunity they need to compete and grow. This program will build on ACCION’s proven model and bring two more top-tier microlenders into the market next year. By using the $1 million loan pool made available by the City, the new lenders will provide capital to more than 250 small businesses so they can expand and fuel the economy.”
Currently, more than 20 percent of Chicago’s residents work for firms with five employees or less. Many of these firms are located in low to moderate income neighborhoods.
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