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Entrepreneurship hub partners with lenders to help minority and women-owned businesses with capital

by Paula Anderson

In June, the Epicenter, a nonprofit entrepreneurship hub in Memphis, and Pathway Lending, a regional nonprofit Community Development Financial Institution (CDFI), partnered to launch the Memphis Small Business Opportunity Loan Fund, a $15 million fund intended to improve access to capital, particularly for minority- and women-owned businesses. Initial capitalization of the fund is being provided by Pinnacle Financial Partners, First Tennessee, and Regions Bank.


Leslie Smith, CEO and President Epicenter, said: “(We) are focused on adding and scaling resources for entrepreneurs in our community, especially as it relates to capital, and making it eas-ier for local entrepreneurs to fund their businesses. This fund is a flexible and affordable way to support entrepreneurs and business owners -- particularly in communities of color -- with capital at a critical time in their growth.”


“Administered by Pathway Lending, housed in the Epicenter offices in Cooper-Young, the Memphis Small Business Opportunity Loan Fund will provide businesses in the Memphis region that may not yet qualify for a conventional bank business loan with access to loans ranging from $5,000 to $1,000,000 to support growth opportunities. Memphis Small Business Opportunity Loan Fund clients may also receive access to technical assistance from business advisors.


This is a new initiative within Epicenter’s “capital stack” concept, which prioritizes access to a variety of capital types – from angel investment, to bank debt and equity – all designed to help entrepreneurs scale no matter their stage of business,” added Smith.


Travis Hughes, Vice-President Lending, said “As a CDFI, our goal is to provide responsible capital and technical business ownership training in underserved markets. As a certified CDFI, our primary goal is to ensure that 60 to 70 percent of our activities are concentrated on minority business owners and those located in low-income census tracts.”

Over the past two months, there have been two informational workshops with 150 prospects, 240 calls have been generated and 30 applicants received. According to Hughes, a total of $2 million has been approved since the announcement.


Hughes said, “We’ve worked with Lonnie Yates at X-Cel Business Products for about two years. He actually used to work for the State, helping entrepreneurs start businesses, and now we get to help him succeed in business for himself.”


Lonnie Yates, owner of X-CEL Business Products, said, “Working with someone like Pathway Lending, who is small business friendly, has been really helpful. Not only do they work with you on the finance side, but they also provide you with guidance. My business advisor, Mason, has helped me dig into my numbers and helped me plan better. Just being able to talk to him and toss around some ideas really worked out well for me – it’s been most helpful.”


“The biggest area of opportunity is the preparedness of loan applicants and the education component. We try to work with entrepreneurs to make sure they’re in a good place before applying,” said Hughes.


After the approval process, Hughes said, “Pathway Lending will assist clients with technical training and assistance.” Another barrier for entrepreneurs can be credit worthiness.


Hughes states. “We consider the “5 C’s of Credit:” character, collateral, cash flow (or capacity) capital and conditions, but as a nonprofit lender we have to add another “C” - coachability."


“We get to know our loan clients beyond the numbers and want to work with you to make good business decisions. We want to help build strong businesses, so the more coachable

you are as a business owner, the better,” said Hughes.


Travis Hughes can be reached at travis.hughes@pathwaylending.org or call 901-930-9367.

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