Two new initiatives by Chattanooga city government are aimed at helping small and minority-owned businesses grow and thrive.
Immediately, the city is seeking to join a San Francisco-based nonprofit, KIVA, that uses crowdsourcing to raise money for small business loans.
The Chattanooga City Council voted unanimously on Tuesday night to let the Office of Multicultural Affairs partner with Co.Lab to form a local KIVA Chattanooga office. The city will put up $43,000 to establish a position at Co.Lab, Multicultural Affairs Director James McKissic told council members.
Four foundations — Footprint, Lyndhurst, Benwood and Community — are kicking $200,000 into the loan pool, and the rest will come from local individuals, McKissic said.
"Basically, this is a GoFundMe for business owners," he said.
Founded in 2005, 1.7 million KIVA lenders have funded more than $1 billion in loans to 2.7 million borrowers in 82 countries, according to the organizations' website. Loans can be up to $1o,000 and the website boasts a 96.9 percent repayment rate.
"The KIVA model works internationally and nationally because people like us put their money where their mouth is," said Economic Development Director Donna Williams.facebook
Over the longer term, Mayor Andy Berke budgeted $100,000 to study whether small and minority-owned businesses are able to compete for and receive city contracts.
Council members talked at their strategic planning session about the city's purchasing procedures and how to assess whether businesses of various size and ownership have an equal chance at the city's business.
Smaller businesses may face financial barriers that impede their ability to be bonded and insured, to accumulate capital and to comply with dizzying complicated bidding and contract rules.
Maura Sullivan, chief operating officer for the city administration, said many other cities have done disparity studies. She said the Office of Multicultural Affairs and the mayor's Minority Business Task Force have worked on the issue.
Such a study would look at the size and ownership of city contractors and vendors and weigh whether small and minority owned firms have a chance at competing for city bids.
Chattanooga's study, she said, should be a "tool to use as a lever in our community and not just a hammer saying we've done something wrong."
Sullivan said the city administration is drafting a request for proposals. Once a vendor is chosen, the study could take months and results could be implemented in a year or so, she said.
McKissic said his office has worked with small businesses encouraging them to develop the skills and capacity to take on city business, but most of them need help to get going.
"A lot of people in Chattanooga are just not ready to take that step — they need a lot more support," he said.
Contact staff writer Judy Walton at email@example.com or 423-757-6416.