Aid offered to minority, low-income businesses

Four cities targeted, including Baltimore

January 27, 2001|By Andrea K. Walker | Andrea K. Walker,SUN STAFF

As one of the largest black-owned investment businesses in the country, Smith Whiley & Co. always saw the need to invest in minority and low-income communities, but it couldn't find the backers to pull it off.

Now, with some help from Bon Secours Health System Inc. and the federal Small Business Administration, the Hartford, Conn.-based investment company has $20 million to help small businesses grow in four cities.

Baltimore businesses will be eligible for $5 million.

"We're aware of the difficulties people have in inner cities, particularly those of color, so the issue of making capital available is important to us," Mustafa Abdul-Salaam, Smith Whiley's managing director, said yesterday.

Some of the money will go to start-ups, but Abdul-Salaam said his company wants to focus on expanding businesses that have shown a commitment to their communities and are less risky investments.

Businesses can submit business plans and applications now to Smith Whiley, which will choose the recipients.

Smith Whiley hopes that the expansion of the chosen businesses will lead to more jobs, a bigger tax base and increased property values in communities that have missed out on the country's recent economic boom.

Though many banks have improved lending practices over the years, blacks and other minorities are often excluded from mainstream sources of financing, business experts say. Black business people say finding capital is one of their main obstacles.

Smith Whiley joins the ranks of nonprofits, private companies and government agencies, including some in Maryland, that have created alternative forms of financing.

Smith Whiley had trouble getting money when it started its initiative in 1995. Bon Secours Health System offered $5 million immediately, but other companies turned Smith Whiley's pitch down one by one.

"We have to go beyond the walls of our community to try to support the infrastructure that exists," Everard O. Rutledge said yesterday. Rutledge is vice president of community health for Bon Secours, a Marriottsville-based Catholic health system.

The SBA filled the gap through a program in which the federal agency provides $3 for every dollar Smith Whiley raises.

The money, set up in the Bon Secours Community Investment Fund LP, is going to cities with Bon Secours facilities. Detroit, and in Hampton Roads and Richmond in Virginia are also on the list.

Officials said they expect to provide $100,000 to $1 million to each of five to 10 businesses in Baltimore. They said the improvements will complement the revitalization of the Inner Harbor and downtown.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.