Northwestern Mutual Providing $5 Million For Black-Owned Business Loans

Northwestern Mutual is providing $5 million to two Milwaukee institutions as part of a strategy of increasing access to capital for Black entrepreneurs and businesses locally.

The investment comes as part of the insurance company’s $100 million impact investing fund, announced in 2021.

“Black and African American businesses owners, for a variety of reasons, have had limited access to traditional financial markets, and this latest investment will deepen our mission to make a bold and long-term impact that drives access and equity,” said Ray Manista, the company’s executive vice president and chief legal and compliance officer, in a statement announcing the investment.

A loan fund will be created by Northwest Side Community Development Corporation (NWSCDC) and Legacy Redevelopment Corporation. Both operate as federally-certified community development financial institutions (CDFIs).

“We’re thrilled to partner with Northwestern Mutual and provide much-needed loans to local, Black and African American-owned businesses,” said LRC president and CEO Terese Caro. “This partnership will change the trajectory of LRC and NWSCDC in terms of what we’ll be able to do and the communities we’ll be able to impact.”

NWSCDC is led by Willie Smith. Since 2000, its website says it has provided more than $11 million in loans to businesses on the city’s northwest side. It has participated in financing multiple grocery stores, the Villard Square Library, the purchase of Century City Tower (former Eaton headquarters) and a number of other projects.

LRC made its first loan in 2003. It has backed Tonda Thompson‘s Valor Creative Collective hub, which will go into a redeveloped building at 128 E. Burleigh St.

LRC is focused on housing and commercial real estate, while NWSCDC focuses on business and neighborhood growth. The two organizations both offer loans and technical support to participating business and entrepreneurs.

According to a 2021 Bank of America survey, 56% of Black entrepreneurs cited access to capital as a recurring obstacle.

The impact investing fund is an outgrowth of the company’s 2020 Sustained Action for Racial Inequality task force. Created in the wake of the killing of George Floyd, the task force is led by president and CEO John Schlifske.

At the time of its August 2021 public announcement, Northwestern Mutual said $30 million had already been invested from the fund. That included an investment in Milwaukee entrepreneur Dana Guthrie‘s Gateway Capital startup investment fund. The insurance company also announced an investment in a national minority-owned business investment fund.

The impact investing fund is intended to generate a positive return for policy owners.