CAPTION 1: Antwanye Ford serves as the president of the Greater Washington Black Chamber of Commerce. (Courtesy photo)
District and business leaders want entrepreneurs in Wards 5, 7 and 8 to take advantage of a program that offers capital through community investors on terms less stringent and cumbersome than traditional banks.
In September 2021, D.C. Mayor Muriel Bowser, D.C. Deputy Mayor for Planning and Economic Development John Falcicchio and leaders of marketplace firm SMBX agreed to set up the DC Rebuild Bond Program.
SMBX, which facilitates the funding, works through the Equitable Capital Access Fund Grant which will allow businesses in the three wards to build, expand and innovate their operations. The program offers $5 million in bonds from individual investors.
Ben Lozano, CEO and co-founder of SMBX, said local investing distinguishes the bond program from other business finance initiatives.
“By turning neighborhood fans into active investors in their favorite businesses, we’re creating a financial system that benefits everyone in the community and helps keep the cycle of wealth and prosperity local,” Lozano said.
Antwanye Ford, the president and CEO of Enlightened, Inc., and president of the Greater Washington Black Chamber of Commerce, embraces the bond program.
“This is a $5 million investment in local small businesses,” said Ford at a community meeting on the program in Ward 8 on Feb. 15. “Businesses can raise capital directly from their customers. The money they borrow can be repaid monthly and those monies can be used to reinvest in the program. I believe in this program.”
Ford said borrowers will not have to deal with hidden fees, unreasonable terms or personal guarantees as collateral won’t automatically be a requirement for a loan and interest rates will be reasonable.
“This is a good program,” said Ford. “We need to get the word out.”
A potential participant will fill out an application and submit it to a SMBX staffer. In order to qualify for a bond, a few years of financial statements and tax returns must be submitted to SMBX. SMBX submits the paperwork to potential investors. Meanwhile, SMBX prepares a marketing strategy for participants including using social media and traditional advertising.
When it comes to closing an offering that has been made by investors, SMBX releases the funds to the participant and a repayment plan becomes set. Repaying consists of paying the money back on the same date, at the same interest rate monthly. Automatic withdrawal serves as the means of repayment.
SMBX officials said businesses owned by returning citizens can qualify for bonds but owners who have certain felonies won’t be able to participate. Additionally, credit worthiness for a bond lies primarily with the character of the participant and how they have dealt with financial defaults and liens, not on a hard score from the credit agencies.
Manny Cosme, founder and CEO of CFO Services Group., a bookkeeping and financial strategy firm, praises the program.
“I was leery of it at first but I am glad I participated,” Cosme said. “I received a $65,450 bond from seven investors at a 7% interest rate with five years to pay it back. I am using the money for digital marketing and advertising. The people at SMBX really worked with me through the process.”