City of Chicago Micro Loans Available
Deborah Bayliss | 10/16/2013, 4 p.m.
Mayor Rahm Emanuel and City Treasurer Stephanie Neely are hopeful that a $1 million micro lending initiative will lead to new jobs in Chicago while the city’s new Express Lane service that allows customers to renew and apply for a business license, eases the pain felt by those who go through the process.
“Small businesses are the engines of growth in our neighborhoods and the backbone of our economy, yet too many entrepreneurs report difficulty in obtaining the financing they need to start up or expand,” said Mayor Rahm Emanuel. “By partnering with City Treasurer, Stephanie Neely, we are expanding the market for small dollar loans and building upon the great success we’ve seen with our micro lending initiative to create more opportunity and grow jobs.”
The $1 million would help support roughly 300 new small businesses.
Launched in 2012, the Chicago Micro lending Institute (CMI) trains and develops micro lenders to expand small business financing in Chicago.
To date, according to the City, more than 110 small business owners have received over $900,000 in loans, creating or preserving approximately 500 jobs.
“Coming from a family of entrepreneurs, I know how important affordable capital is to a growing business,” said City Treasurer Stephanie Neely. “Our experience with micro lending has been an unqualified success and I am happy to partner with Mayor Emanuel to expand this much needed initiative."
The loans were made by Accion Chicago, the City’s partner in establishing the CMI, and the two new micro lenders trained through the program: the Women’s Business Development Center and Chicago Neighborhood Initiatives (CNI).
The Chicago Department of Business Affairs and Consumer Protection (BACP), anticipates the remaining funds will be loaned out by December 1.
Beneficiaries of the program, according to the Mayor’s office, represent the diversity of Chicago’s neighborhoods and business owners: 75% of borrowers were minorities, 57% were women-owned, and 59% had low-to-moderate incomes.
Loans provided through this program are sized to provide small businesses with small but critical funding to support their growth, with 37% of loans falling below $5,000 and 67% below $10,000.
In March, the Mayor launched the City Hall Small Business Center (SBC) and streamlined permit and licensing reviews to provide small business owners and entrepreneurs a one stop shop resource to help launch and grow their business.
With the new Express Lane service, customers can update account information, print a new license, renew a license, and apply for a peddler’s license.
Additionally, the Mayor created a restaurant start-up program, reducing the time to start a restaurant by 50% and increasing the efficiency of inspection visits.
Startup and operating costs are also lowered for small business owners with phase out of the Head Tax that required businesses with more than 50 employees to pay a tax of $4 dollars per employee.
Phase –out of this tax burden reportedly has already had an impact in the first stages, saving small businesses $2.4 million in the first half of 2013, with full year savings expected to be $4.8 million dollars.
In 2014, with the head tax phase-out completion, small businesses in Chicago will see a savings of over $9.0 million dollars every year.