The Black Caucus Foundation of Michigan in Detroit has formed a collaboration with DRI Fund, ProFinCo, and Crowdz to launch the Capital and Cash Flow Program, a $40 million initiative to empower Black businesses with low-cost access to capital, $10 million of which is immediately available to contractors in the city of Detroit.
Black businesses have historically been prevented from accessing low-cost capital, but this partnership aims to address what has traditionally been the biggest barrier to growing sustainable Black businesses in public works and construction projects. infrastructure.
“There have been hundreds of announcements regarding access to capital for black businesses since the murder of George Floyd,” says Sen. Marshall Bullock (D-Detroit), chair of the Michigan Legislative Black Caucus and chair of the Black Caucus Foundation of Michigan.
“Yet the needle has not moved on the number of black entrepreneurs in infrastructure or the availability of capital to create their access. There’s no better place to change that than Detroit, and there’s no better opportunity for success than Michigan.
The program is designed to build the capacity of small, minority, and disadvantaged businesses to compete and successfully execute major public works projects for the State of Michigan and beyond.
It is designed to eliminate cash flow disruptions or growing debt accumulated from acquired loans to offset receivables. Specifically, this program advances up to 80% of all invoices associated with City of Detroit contracts, helping businesses that are sometimes forced to wait up to 120 days or more for payment.
It also targets additional technical support to potential contractors who have skills that make them viable candidates for larger public works and infrastructure opportunities with the state. The program will quickly transition to Detroit Community School District service providers and other organizations that have the potential to stimulate a broader base of infrastructure entrepreneurs in Michigan.
With contracts estimated at $2 billion from the City of Detroit and the Detroit Community School District about to begin, the collaboration also aims to use the Capital and Cash Flow program to advance certified disadvantaged and minority businesses into larger contract opportunities with the Michigan Department of Transportation.
“MDOT applauds the creators of this new Capital & Cash Flow program, which we believe will enable more minority-owned businesses to enter the public sector infrastructure market and grow their businesses,” said Tony. Kratofil, COO of MDOT. “The bipartisan Infrastructure Act has created unprecedented levels of investment that represent opportunities for minority-owned entrepreneurs to participate in building our communities and the infrastructure they rely on.”
Those leading the effort say the need for such an initiative is greater than ever, with 93% of all supply chain participants being small and medium-sized enterprises (SMEs), and half of them suffering. cash shortages, often waiting long periods of time to be paid. . Those leading the effort also point to the operating costs charged by hard money and merchant lenders that destroy a company’s profits.
The Capital and Cash Flow program is a component of the Bridges to Capital African American Business Initiatives. Early registration for the program is ongoing and entrepreneurs can apply for funding immediately.
The Capital and Cash Program can be accessible hereor through the Black Caucus Foundation of Michigan at 313-285-9234.