Responding to the needs of “economically isolated” entrepreneurs, the Cleveland Foundation assembled a working group to examine the issue of small business lending in early 2011. A subsequent study of the microcredit landscape in Cuyahoga County, which the foundation commissioned with the Business of Good Foundation, estimated an unmet need of $38 million in loans under $50,000. The gap primarily affects minorities, immigrants and women, whose businesses may be either too small to interest conventional lenders or deemed not creditworthy.

The first small, but proactive, steps to address this issue, supported by Cleveland Foundation grants, met with positive results that prompted the formation of a public-private partnership consisting of the foundation, the City of Cleveland, Cuyahoga County, the U.S. Small Business Administration, Huntington Bank, the Greater Cleveland Partnership, the Commission on Economic Inclusion and the Business of Good Foundation. The partners contributed $4 million to fund microloans and $600,000 to provide loan recipients with training and technical assistance. The Columbus-based Economic and Community Development Institute (ECDI) was recruited to manage the microlending program.

Even before the program’s July 2012 launch, ECDI had made eight loans to local entrepreneurs totaling $163,000. As of the end of 2013, 30 businesses owned predominately by women or racial or ethnic minorities had received loans totaling $1.3 million. Nearly a third of these enterprises are based within the city of Cleveland.