Millions for St. Louis minority business development may be coming

Katie ArnoldJP In The News, News

From the St. Louis Business Journal.

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 –  Reporter, St. Louis Business Journal

Minority business development in St. Louis is getting a boost, with two nonprofits winning certifications that could lead to millions in additional capital.

The nonprofits, Justine Petersen and Urban Strategies Inc., recently received Community Development Financial Institution (CDFI) certifications that will enable them to raise additional capital to increase minority entrepreneurial development.

“This could result in millions of additional dollars,” said Galen Gondolfi, Justine Petersen’s senior loan counselor. “There is more opportunity for strategic fundraising with this structure.”

Justine Petersen, whose for-profit Great Rivers Community Capital already held CDFI certification, has won another certification for its nonprofit Housing & Reinvestment Corp., which receives investments from financial institutions, philanthropy and private wealth.

“Having tandem CDFIs broadens our capitalization efforts, as grant opportunities may exist for our nonprofit CDFI, yielding an increase in available dollars to deploy throughout our service footprint of Missouri, central and southern Illinois and eastern Kansas,” Gondolfi said. “There are also inherent benefits in achieving economies of scale with the certification of an additional CDFI.”

At Urban Strategies, “Our goal is to propel entrepreneurs to prosperity and economic liberation through the creation of middle-income and wealth generating jobs and businesses,” President Esther Shin said. “We hope to achieve this goal through launching a loan fund that provides equitable and accessible capital to Minority Owned Business Enterprise and local firms for contracting and development opportunities.”

Urban Strategies, which revitalizes neighborhoods, is a national nonprofit with a presence in 24 cities and more than 40 neighborhoods across the country, with St. Louis serving as its base.

CDFIs are private financial institutions that provide capital, loans and other financial services to Black- and other minority-owned small businesses in an effort to get them into the economic mainstream.

Justine Petersen told the Business Journal last month that the latest round of the federal Paycheck Protection Program (PPP) is attracting a flood of interest from Black- and other minority-owned small businesses in low-income neighborhoods. In the first round of PPP, Justine Petersen closed 436 loans, totaling $14.8 million, with 74% of loans going to minority small businesses. Moreover, 62% of loans went to small businesses headed by women, and 71% of loan volume serviced businesses in low-to-moderate income communities.