Mayor Emanuel Announces New Campaign to Help
Small Businesses Avoid Predatory Lending Practices
Mayor Rahm Emanuel is bolstering the City of Chicago’s support for small businesses with the launch of a new campaign to help business owners avoid predatory lending practices. In recent months, Business-to-Business (B2B) lending companies like Merchant Cash Advance (MCA) have accelerated their marketing efforts, resulting in numerous small businesses taking loans they cannot afford. The new campaign will help educate small businesses on MCAs and inform them about city programs like Capital Access Centers (CACs) and the Chicago Microlending Institute (CMI) that offer financial counseling and affordable loans.
“Small businesses are the backbone of our economy and their success is important for Chicago’s economic future,” said Mayor Emanuel. “Access to capital is a priory for our small businesses, but it has to be affordable and we need to ensure that businesses understand what programs are available to them and how to protect themselves as they grow.”
The city will promote this new campaign on the CTA as well as through e-mail, new workshops on access to capital, and education for the City’s Neighborhood Business Development Centers.
In October 2014, the City established Capital Access Centers (CAC) to help small businesses better understand all of their loan options, and to help them improve their credit so they can get a more affordable loan. The CACs can connect businesses to the right lender and be an advocate in the lending process. They primarily work with small businesses seeking loans between $25,000 and $250,000.
In addition to workshops around improving credit, the City is adding new workshops on Access to Capital and has created a new website devoted to protecting businesses from predatory lending practices – www.cityofchicago.org/businessloans. The City will also leverage its Neighborhood Business Development Centers to educate businesses on predatory lending.
Two years ago, Mayor Emanuel launched the Chicago Microlending Institute(CMI) to help businesses access loans up to $25,000. CMI is a revolving loan fund of $2 million to help seed new microlenders that can offer affordable business loans between $500 and $25,000.
“Until regulation is in place, the City of Chicago will continue to relentlessly promote its business resources and forge partnerships with reputable lenders who can truly help businesses start, thrive and grow,” said Commissioner Maria Guerra Lapacek of the Department of Business Affairs and Consumer Protection.
More information about business resources is available on the City of Chicago’s Small Business Center website at www.cityofchicago.org/SBC.