DETROIT—Corporate investment is reviving parts of downtown Detroit, but the rest of the city's future may rest in the hands of low-income entrepreneurs. A growing number of immigrants and African-Americans are launching small businesses against all odds in Detroit's crumbling neighborhoods.
In the past two years, roughly 300 Detroiters have made business plans, learned to balance their books, and applied for micro loans through ProsperUS Detroit, a relatively new nonprofit organization focused on helping low-income small-business owners thrive in five struggling Detroit neighborhoods. Its 20-week business class and coaching sessions have launched marketing firms, beauty salons, and catering companies—and coached would-be business owners through some of the obstacles that can make starting a new venture seem too daunting.
"It's not just writing the business plan," says Kimberly Faison, director of ProsperUS. "It's writing the business plan, and your house is in foreclosure. It's writing the business plan, and your car got repossessed."
Poor credit bars many small-business owners from getting bank loans, so ProsperUS offers credit counseling, budgeting, and accounting help. About 40 percent of program graduates have opened new businesses in the city since 2012, and 47 percent already own one, according to a survey of participants. None of them have defaulted on their loans.
The biggest challenge now is reaching immigrant entrepreneurs, Faison says. Many don't speak English, and they often distrust financial institutions. One of ProsperUs's goals is to offer its business-training program in Arabic and Spanish. Right now, about 85 percent of participants are African-American. Several are former autoworkers, such as Willie Brake and Helen Shaw.
Brake, who owns a computer-service store called All About Technology, worked with accounting and marketing experts from ProsperUS to open his first retail location and hire his first employee in a largely Hispanic neighborhood in Southwest Detroit. Helen Shaw, 39, assembled Ford Expeditions in suburban Detroit for 10 years before the factory shut down in 2006. She went to beauty school and began doing hair in her midtown apartment. A few years ago, she wanted to make the jump to opening her own salon. With the help of ProsperUS, she was approved for a $25,000 loan and was able to move her salon, Model Behavior, from a run-down street to a more upscale area in Southwest Detroit. Shaw says she wouldn't have gotten this kind of support if she opened her salon in the suburbs.
"We need it in the city," she says. "If you ride up certain streets, there are no businesses open. It's just all abandoned businesses. The city is where we need the help."
This article is from the archive of our partner National Journal.
This article is part of our Next America: Communities project, which is supported by a grant from Emerson Collective.