No time for risks or red flags: Why this fund backs ‘unbankable’ businesses in WYCO’s investment desert

A partnership between NetWork Kansas and the Wyandotte Economic Development Council is providing minority entrepreneurs in Wyandotte County with loans and technical assistance to get their business ideas off the ground.

The Empower WYCO fund provides no-match loans of up to $15,000 — which can be used for equipment, inventory, building purchase and repairs, infrastructure, refinancing, and working capital — to small businesses that are often turned away by banks.

Jonnathan Salazar, Wyandotte Economic Development Council

Greg Kindle, Wyandotte Economic Development Council

“These are typically those small businesses that are unbankable, that typically can’t get past a certain level of business without some sort of small infusion of cash to get them beyond just the concept and really moving forward,” said Greg Kindle, president of the Wyandotte Economic Development Council.

Beyond the funding, business owners also receive coaching from one of five technical assistance partners: JCCC Small Business Development Center, Black Mastermind Group, The Toolbox Small Business Resource Center, Entrepreneur Business Basics, and The Porter House KC.

These community partners help entrepreneurs fully understand the business side of their idea, Kindle said, so they can be prepared for success.

“The technical assistance partners are really helping them look at that revenue stream, coming up with a profit-loss balance sheet, being able to do some projections in the long term — that core of running a business,” Kindle said.

Once business owners work with a technical assistance partner, they are referred to the financial review board — composed of five community leaders in Wyandotte County — which makes a decision on whether to approve the loan.

Even if the loan isn’t initially approved, entrepreneurs have an opportunity to refine their proposal and re-apply, said Jonnathan Salazar, manager of business retention and expansion for the Wyandotte Economic Development Council.

“We never deny anyone,” Salazar said, “It’s always a ‘Not yet,’ so we’ll give them a couple different resources to be able to come back again and see if the next time around they could receive the loan.”

That mentality to support the entrepreneurs throughout the entire process guides the program’s operations, Kindle said.

“They’re not just getting a loan and getting pushed back out of the way,” Kindle said. “These are folks that are going to stay with them. … We really want to wrap around these small businesses in every way we can, and give them feedback, and be a foundation for them.”

Busting the credit barrier

NetWork Kansas — which provides the program funding in partnership with the Kansas Health Foundation — initially began a pilot of the Empower fund in June 2021 in four cities across the state, before expanding to Wyandotte County in March 2022, according to Jenn Laird, manager, eastern region, at NetWork Kansas.

Jenn Laird, NetWork Kansas

“NetWork Kansas really identified a need for minority entrepreneurs in accessing capital and put this plan together to help move their businesses forward,” Laird said.

From March 2022 to March 2023, 21 Wyandotte County businesses received nearly $300,000 in loan funding — by far the most of any pilot program in the state, Laird and Kindle shared.

As a result, NetWork Kansas has committed to an additional $200,000 in funding to be awarded by July 1, though Laird emphasized that more loans will be available after that date.

“The sky is really the limit on the amount of funding that could be available in this program,” Laird said.

Other than being a minority-owned, unbankable business registered and located within Wyandotte County, the program has no additional restrictions, Laird said, noting that subpar credit history is not a barrier to entry.

“We don’t run their credit,” Laird said. “Most of the things that would be red flags for a traditional lender are not issues in this particular loan program, and that’s because we know that the entrepreneurs are coming through that technical assistance to be in a place of understanding their business and working on any challenges that they do have.”

Kindle acknowledged that the Empower WYCO fund will need private sector investment to keep expanding, and Laird expressed NetWork Kansas’ interest in finding new partners to create sustainable wealth opportunities for Wyandotte County small businesses.

“We are always interested in speaking with anyone who would like to partner with us to help uplift and create — hopefully — an evergreen revolving loan fund in Wyandotte County that can go on for generations to come,” Laird said.

‘They’re all big to us’

Behind each of the 21 loans are 21 stories, Kindle emphasized, adding that his team works to provide individualized support to every entrepreneur to make them feel comfortable.

“We’re in a bit of a desert, if you will, in terms of investment in these kinds of loans for those who are the most underserved populations, those who really did not know where else to go,” Kindle said.

“Many of the small businesses that we’ve been working with would not have felt comfortable going into some organizations because they’re much, much bigger,” Kindle added. “In our space, they’re all on a podium; they’re all big to us, because we’re just so excited to see entrepreneurialism popping up in the most unexpected locations and from the most unexpected people.”

Seeing their excitement motivates and inspires his team to support these business owners as best they can, Kindle added.

“These folks are so excited about what they’re doing that you can’t help but be as excited for them,” he said.

Thunderlight Work Boots in Kansas City, Kansas

Kindle noted KCK businesses Thunderlight Work Boots and Holy Smoke BBQ as just a couple examples of success stories from the Empower WYCO fund, noting that many of the 21 businesses are serving an important need inside the community.

“Sometimes we get caught up when we talk about entrepreneurship in that it’s all about gaming, or coding, or these really high-tech types of businesses — and those are great,” Kindle said. “But it’s also pretty cool to see folks who are just doing some really nice mom-and-pop businesses that serve a community need or that have figured out a niche.”

Gap financing conduit

Although there are already numerous winners thanks to Empower WYCO, Kindle understands that not every loan recipient will turn their business into a profitable one. However, that’s not the program’s goal, he said.

“No doubt, they won’t all be successful; the numbers are not in our favor in that respect,” Kindle said. “This program isn’t designed to weed out all the risks. In fact, this program is really designed to go the other direction — to really be more favorable to those who maybe don’t have any financials.”

“This is really designed to be for those who are on the very cutting edge in their community, a small business where, ‘What can $15,000 do to get you jump started?’ and hopefully get you into a position where you can get in front of a big bank, or that big operation, or a different kind of loan program,” Kindle continued.

Calling the Wyandotte Economic Development Council a “conduit” within the program, Kindle credited NetWork Kansas for accepting the risk and making the loans possible, which Laird said is the entire goal behind the Empower fund.

“It’s always our organization’s goal to provide that gap financing, to take that higher risk position, so this was a very natural fit for our organization,” Laird said. “We are taking a very intentional and dedicated position in the DEI space and really finding the unique needs of breaking down barriers and bridging those gaps for entrepreneurs.”

Other organizations across the country have been so impressed with the Empower WYCO fund, according to Laird, that they are trying to replicate it in their own communities.

Kindle encouraged any small businesses struggling to find financial support to reach out, and reiterated that the WYEDC would always welcome additional technical assistance partners.

Regardless of how quickly a loan is approved or how successful a business becomes, Salazar noted that the WYEDC continues to provide support every step of the way.

“We’re not just wanting to invest in entrepreneurs and give out a loan,” Salazar said. “We’re still in touch with them and following up with them to see how they’re doing, not just on the front end, but throughout the journey.”

This story is made possible by Entrepreneurial Growth Ventures.

Entrepreneurial Growth Ventures (EGV) is a business unit of NetWork Kansas supporting innovative, high-growth entrepreneurs in the State of Kansas. NetWork Kansas promotes an entrepreneurial environment by connecting entrepreneurs and small business owners with the expertise, education and economic resources they need to succeed.