One of the blessings of working for the Indy Chamber is that it provides daily lessons for me about small business owners’ triumphs and struggles. I was both surprised and inspired to learn that small business creation actually increased in 2020, during a global pandemic (4.4 million new businesses launched in 2020, a 24% increase from 2019).
While the creation of new business is cause for celebration, it is not without certain fragility. Another reality made abundantly clear in the past two years is the challenges small businesses face daily regarding access to loan capital. Current precautionary loan restrictions disproportionately affect small business owners of color and women. To navigate the uncertainty of 2020, the Indy Chamber immediately began providing small businesses with needed working capital. The Indy Chamber shifted 100% of its focus in March 2020 to serve small businesses. Thanks to generous contributions from the Indianapolis business and philanthropic community, it began issuing Rapid Response loans ranging from $1,000 to $25,000 as early as March 30, 2020.
In the first few months, Indy Chamber issued 238 Rapid Response loans disbursing a total of $4.5 million. The Indy Chamber and our member businesses provided advice and support to some of our most vulnerable businesses most urgently in need. Loans, coaching and support were imperative to our entrepreneur community because they provide resources, capital and hope to the financially underserved.
According to the U.S. Minority Business Development Agency, minority-owned businesses are three times more prone to loan rejection than non-minority owners. If those businesses eventually receive approval, they typically pay higher interest rates on lower loan amounts than non-minorities. Knowing these challenges, we were committed to getting as much support as fast as possible to small businesses in need. We made low-interest microloans, loans and grants, and federal PPP funding assistance easy to apply online. We are proud to say 97.3% of businesses whose loans were originated through the hub are current on repayments.
Because of these efforts, in July, the Indy Chamber was honored to be named the 2021 Chamber of the Year, presented by the Association of Chamber of Commerce Executives (ACCE). This is the organization’s first Chamber of the Year designation, awarded for developing a Rapid Response Hub to support businesses through the global pandemic, making nearly $22 million in small business loans and grants in 2020, and our Inclusive Incentives Initiative, which incentivizes companies who receive tax incentives to provide higher wages and better benefits to employees. While it is an honor to receive this award recognition from our peers across the U.S., we need to recognize this award’s actual recipients: the Indy small business community. Without the resilience of our regions’ entrepreneurs, the award recognition would not be possible.
Each one of these small businesses has a unique story. And we are committed to telling these stories to more and more people so that the creativity and innovation of these small businesses become a part of Indianapolis’ identity. That is why I am excited to announce Indy Chamber’s partnership with the Indianapolis Recorder on a new series to tell these inspiring stories. Each week, the Recorder will feature an entrepreneur who has overcome significant challenges to grow a successful business. I am so appreciative that the Indianapolis Recorder, as one of the most admired African American publications in the nation, is willing to provide its platform to tell these inspiring stories.
It’s encouraging to see the central Indiana community create a more inclusive and equitable community through the small business resiliency we’ve seen. Inclusive growth and incentive programs have and will continue to help us recruit more diverse community talent and support the growth of businesses owned by people of color and women.
If you are looking for resources like free one-on-one business coaching, access to financing, business workshops, and online business courses, visit the Indy Chamber website small business services at indychamber.com/entrepreneurship.
Michael Huber is president and CEO of Indy Chamber.