Written by Emily Engel
Detroit’s economic difficulties stem in large part from wholesale relocation of auto manufacturing jobs beginning in the 1970s. The city now has a rapidly declining population, high unemployment, very low property values, high crime rates, and underperforming schools. A variety of organizations interested in the city’s economic future believe that entrepreneurship is the way forward, and are working on multiple fronts to support and promote small businesses.
The Chicago Fed, the Michigan Bankers Association, and the New Economy Initiative for Southeast Michigan co-sponsored a symposium in Detroit on October 16–17 that brought together business experts and owners, policymakers, private capital funders, and bankers to address the issues of small business credit and financing.
Conference sessions began with a presentation of research findings on the MSA’s financial infrastructure and patterns of small business lending by Maude Toussaint-Comeau. Subsequent panels explored, broadly, the “entrepreneurial ecosystem” in Detroit; methods to connect small business owners with technical and advisory resources; on-the-ground experience of banks still active in the market and related compliance issues; and opportunities for small business lending from banks and other sources.
For years, service providers have been investing substantial resources in legal, management, and marketing services to small businesses in the Detroit area. Banks and other lenders have been active in SBA lending, Low Income Housing Tax credits and other programs that mitigate credit risks to small businesses. More recently, foundations, city planners and other civic organizations have been at the forefront of building a new ‘entrepreneurial paradigm’ in Detroit that develops the infrastructure to better connect small business owners with the resources available to them and addresses some of the capital gaps that have created liquidity constraints for small businesses.
For a more detailed summary of the symposium please read the Chicago Fed Letter co-authored by Robin Newberger and Maude Toussaint-Comeau Developing Small Businesses and Leveraging Resources in Detroit.
To view materials from the conference in Detroit please view the Developing Small Businesses and Leveraging Resources in Detroit events page on the Chicago Fed website go here.