New city loan program aims to support minority-, women-owned businesses in District 1

The city of Wichita is rolling out a new program designed to bolster businesses in the city’s District 1 by providing short-term loans to minority- and women-owned businesses.

The PROPEL program, which stands for Providing Resources & Opportunities for Proprietors, Entrepreneurs & Lenders, opens for applications Monday. The city will lend business owners up to $15,000 at 3% interest, and loans must be repaid within 36 months.

The revolving fund will start as an $88,000 pool of money from District 1’s cut of the 2016 Hyatt Regency Wichita sale, when each district was awarded $1 million.

“I’ve heard from several businesses over the years that just needed $5,000, $3,000 or maybe $10,000 to help out,” Vice Mayor Brandon Johnson said. “This type of funding opportunity helps to fill those gaps to make sure that they can access the American dream.”

Johnson represents the First District, which covers a wide swath of central and east Wichita. He announced his reelection bid earlier this month.

“Before I got into office, I knew that business development was a serious issue, and access to capital was something that our community did not have,” Johnson said. “And that’s generational. I mean, you know, when you look at communities that were redlined, historically, that was the big thing — money was not lent to these communities.”

The pandemic has only made things harder for minority- and women-owned businesses and prospective business owners, he said.

In practice

Christina Long owns CML Collective, the firm that partnered with the city to develop the PROPEL program, and which will continue to help manage it.

“What we wanted to make sure to do was to create a process that worked for the city of Wichita based on the experiences that we’ve had with multiple loan programs — specifically those that are targeting borrowers who may not traditionally qualify for other types of traditional funding,” Long said.

She said these loans are only intended for “short-term and specific” business needs.

The only allowable uses of funds include expenditures related to office equipment, furniture, fixtures, inventory, supplies, repairs, renovations, marketing and advertising expenses, software, printing, postage and fees, Long said.

She said loan servicing will be done in a manner that accommodates business owners’ needs.

“We want to make sure to give people as much of an opportunity to demonstrate that they can repay those loans,” Long said. “The loan modifications, for example, if you need to defer or do interest-only payments, the loan servicer will be working with us.”

In instances where businesses are unresponsive after six months of trying to collect on the loans, a traditional write-off protocol will be followed, she said.

As a revolving fund, Johnson said the pool of money should be self-sustaining. But he hopes to see outside investment from groups and individuals who believe in the mission of supporting underprivileged business owners.

“It’s bigger than $88,000,” Johnson said. “I mean, truly, we are seeking more investment to keep this revolving fund going to help level the playing field for Black and Brown entrepreneurs and businesses.”

He said sustainability will be a key to tracking the success of the PROPEL program.

“For me, outside of the surface, smiling faces and signs going up, it’s going to be looking at how many new businesses came from this,” Johnson said. “How many businesses we actually helped, and sustainability-wise, over the years, are they growing?”