'This requires long-term commitment': Northwestern Mutual partners with financial institutions to invest in Black community's future

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Legacy Redevelopment Corp. President and CEO Terese Caro is shown May 13 at the organization’s offices at 1536 W. North Ave. in Milwaukee. Legacy Redevelopment is one of two organizations to receive money from Northwestern Mutual to provide assistance for minority-owned businesses to get capital to grow.

Starting a business is easier than most people think, but getting access to capital to grow and maintain that business is where the difficulties lie.

For Black Americans, getting access to funding has been historically challenging, but Northwestern Mutual is trying to lessen the burdens of entrepreneurs in Milwaukee.

“Traditionally, Black and African American business owners don’t have the same kind of access to capital that you might see in other segments of society,” said Ray Manista, Northwestern Mutual chief legal and compliance officer.

“That’s a fact in Milwaukee, that’s a fact nationally. And we, as a financial services company, we see that as a place where we can help. We feel that’s an area where we can leverage strength and meet a need where there’s an opportunity.”

More: Northwestern Mutual is investing $5 million in two Black-led Milwaukee financial institutions

More: Here’s how Wisconsin’s Black chamber plans to create 3,000 new businesses statewide by 2024

Using $5 million, Northwestern Mutual is turning to Legacy Redevelopment Corp., 1536B W. North Ave., and Northwest Side Community Development Corp., 4201 N. 27th St., to help get the funds to the right people.

A fund has been set up for both community development financial institutions to draw money from as needed.

Terese Caro, CEO of Legacy Redevelopment Corp., said the organization has been trying to develop relationships with other businesses for years without much success.

“We’ve been giving out loans but very, very sporadically because we haven’t been able to secure financing like this where we feel comfortable enough to know if there’s a deal on the table that we can fund it,” Caro said.

“We do have the business, we have the pipeline, we have the people that we want to support, but we haven’t been able to get people to invest in our organization, even though we do great work in the city of Milwaukee.”

Microlending specialist

Legacy Redevelopment specializes in microloans ranging from $5,000 to $300,000 depending on each business, but the sources of funding haven’t been as consistent, until recently.

“Small businesses will be able to expand their offering with the services or products that they have,” Caro said. “They’ll be able to purchase more inventory and equipment. Also being able to hire people, and the goal is to hire folks that are in the communities that they serve.”

When asked if companies have approached them to get involved with the fund, Caro’s answer was blunt.

“I’m going to be honest, prior to May 2020, no,” Caro said. “Since the murder of George Floyd, yeah, you’ve seen more organizations willing to insert dollars into minority neighborhoods.”

In 2019, Northwestern Mutual invested $1.7 million in grants for the Amani Housing Strategy and has also done work in the Metcalf Park neighborhood. However, Caro said this is the first time Legacy Redevelopment has had a relationship with the company.

“This is a new relationship,” Caro said. “This is our first time having any interaction with Northwestern Mutual. They weren’t one of the original organizations that we reached out to. We didn’t see them in this facet, but they have this department that I wasn’t aware of that invests into communities, such as the ones we serve.”

While Caro is appreciative of Northwestern Mutual’s support, the timing of the partnership is not lost on her.

“It shouldn’t have taken the death of a Black man to do it, but if people are just starting to see things how they really are and want to help and we can stay on this track, then I’m hopeful for the outcome for people of color,” Caro said. “I’m hopeful and prayerful that it won’t take any more deaths and things of that magnitude to see that everybody needs help.”

Plans to increase lending capital

Caro said Legacy is hoping to increase its lending capital and get another $2.5 million to $10 million through partnerships with other organizations.

“I would like to use this as an opportunity to have other conversations with other organizations that we’ve tried to enlist in helping to help small businesses in the past,” Caro said. “And maybe they passed on us and (for them) to see that we have a relationship now with Northwestern Mutual is going to be pivotal for our organization to grow.”

With $100 million being set aside for “impact investment capital” to be used on the Black community nationwide, and an additional $20 million being used for venture capital for Black entrepreneurs, Manista said Northwestern Mutual hopes this is the start of change that will bear fruit in the coming years.

“This requires long-term commitment, sustained funding, sustained focus over time,” Manista said. “So it will take years to see some of the fruits. But the near-term opportunity is to get people the money that they need to sustain their businesses, to change their business plan, to seize new opportunities.”

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This article originally appeared on Milwaukee Journal Sentinel: Northwestern Mutual investing in financial future of Black community

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