COLUMN IN THE SALEM NEWS
By Stratton Lloyd and Michelle Xiarhos Curran
Small businesses are the lifeblood of our communities, and they play a critical role in creating vibrant main streets and strong local economies. In our area eateries, bookstores, salons, shops and tech companies, we make connections, support our friends and neighbors and witness innovative entrepreneurs in action.
In ordinary times, small business owners — especially immigrants, women and minorities — face significant challenges when starting and sustaining businesses, particularly when it comes to accessing financing. According to the Federal Reserve’s 2019 Small Business Credit Survey, only half of the 43% of small businesses that applied for financing received the requested amount. With the COVID-19 pandemic stretching into its ninth month, challenges like these continue to be compounded. According to recent data from Harvard University’s Opportunity Insights, the number of small businesses open in Massachusetts fell 37% from January to November 2020. The result is lost livelihoods, empty storefronts and a bump in unemployment — plus the myriad ripple effects that follow.
Today, it’s up to all of us to ensure that our small businesses survive these unprecedented times and thrive into the future. Our cities and towns depend on it.
To support local businesses, a new coalition of partners recently announced the creation of the Salem Small Business Loan Fund. Spearheaded by ECCF and in conjunction with the city of Salem, Mill Cities Community Investments, the Salem Partnership, the Enterprise Center at Salem State University, the North Shore Community Development Coalition and Eastern Bank, this $1 million loan fund is a new opportunity for Salem’s entrepreneurs to access capital and technical assistance to start or grow their businesses. Ranging from $5,000 to $100,000, the low-interest loans available from this fund will prove to be a critical lifeline for existing businesses and start-ups that have difficulty accessing financing through traditional lending sources.
“The technical assistance piece is an integral part of the program, a unique offering that is not often associated with a loan program,” Salem Mayor Kim Driscoll said. “Not only will businesses be able to seek the financial resources they need, but they will receive invaluable advice and support as they navigate the program and position themselves for success.”
Technical assistance — which will come in the form of workshops and one-on-one consulting — will be provided by seven local and regional organizations committed to investing in and developing local communities. The fund is made possible by financial commitments from seven local lending institutions. This is a true collaboration.
(For a list of all organizations supporting small businesses through the collaborative work of the Salem Small Business Loan Fund, visit www.mccinvest.org/salem.)
Similar loan programs — which also leverage powerful public-private partnerships — have been successful in both Lawrence and Haverhill, two other Massachusetts Gateway Cities where entrepreneurship and small business ownership are vital to economic inclusion. Furthermore, loan funds like these allow us to serve businesses today, and in the future with recycled capital as loans are repaid.
The Salem Small Business Loan Fund is part of ECCF’s larger vision for a countywide small business support network that ensures all the region’s entrepreneurs have the opportunity to succeed, making Essex County the best place for small businesses to thrive. The need for such a systems-based solution is more important now than ever before as we navigate federal and state stimulus and support the recovery and sustainability of our small business community.
You too can play a critical role. As you finish up your holiday preparations over the next couple of weeks, consider shopping local whenever possible. Most small businesses rely on this critically important retail season to survive and have made incredible efforts to pivot operations over the last nine months to remain open. They have shown innovation, courage and resiliency in the face of unprecedented economic times. We encourage you to support them now — and throughout the year — so that they are still here for us not only when normalcy returns, but well into the future too.
Let’s work together to hold onto what makes our communities vibrant and unique. Together, let’s support an environment where small businesses have the chance to prosper.
Stratton Lloyd is executive vice president and COO at Essex County Community Foundation. Michelle Xiarhos Curran is the foundation’s communications writer.