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Training for Growth Capital
“I received top notch education on how to determine the best capital programs for my company. This is a tough economy to find money in, and we are still working on it, but the connections that we have made through the ICCC program have been invaluable to the continued growth of my company. An organization like ICIC that educates and connects inner city businesses to help them grow and prosper is such a gift!” – Tammy Tedesco CEO, Edibles Rex
One of ICIC’s core strengths since its founding in 1994 has been its enduring dedication to collaboration between the public and private sectors. Not only do we accomplish this externally through truly innovative formal partnerships with banks like Next Street, but also internally through various programs. No project exemplifies this credo more than Inner City Capital Connections (ICCC), the nation’s only program that educates urban companies about capital and then matches them with financing to spark growth.
The program, anchored by a collaboration between Bank of America and ICIC, has helped 375 businesses in 35 states earn over $700 million in investment capital. Today’s Capital Training Day will see 75 companies from around the country convene in Detroit for a day-long capital education workshop. The 8th annual workshop will include educational sessions on different kinds of capital, including angel investments, venture capital, bank loans, lines of credit, and factoring. Entrepreneurs will additionally receive personalized mentoring from both debt and equity providers on how to effectively communicate with capital providers. Leading this year’s educational sessions are executives from John Hancock’s Financial Network’s Michigan Financial Companies, LSQ, Next Street, Huron Capital Partners and Detroit Venture Partners, among others. Along with companies from Chicago’s October 29th Capital Training Day, these newly educated companies will emerge ready to compete for capital during the ICCC Match Day on November 9th in the center of the financial world, New York City.
Fact: Minority owned businesses have been growing faster than all others for the last decade but their loan denial rates are five times higher. What accounts for this discrepancy? A wide variety of factors have played a role, but perhaps the most glaring factors are federal policy, the way banks have traditionally evaluated investments, and a simple lack of exposure or history of banks working in these geographies.
ICCC looks to alleviate this gap through a combination of financial education, opportunities for networking between urban businesses and banks, and actual match days in which businesses are given a chance to pitch for equity and debt. Underscoring the vital role that these firms fulfill in their communities, over 5,694 jobs have resulted from the companies that have participated in the program since its inception. Who are these worthy businesses? They range from Avalon Breads, a model Detroit company that only uses organic ingredients and strives to support its surrounding community, to Powerlink Facilities Management, a $25 million dollar operation that used the debt it received through ICCC to grow revenues by over 150%..
Along with collaborations, another ICIC precept has been a belief in the idea that targeted inner city strategies are necessary to alleviate poverty. The proof is in the results: almost 1/3 of companies in the program since 2005 have raised money after participating and over half of them reported at least one promising business referral as a result of exposure to capital providers and their peers. As Avalon International Breads’ CEO Ann Perrault said, “Being in a 2 million dollar business is very different than being an entrepreneur.” Today’s training day and future events are designed to aid that transition.
BY Sathya Vijayakumar on October 24th, 2012
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