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Shakir Bralock worked as a branch manager for several banks in Detroit for 15 years. Since joining ProsperUs as a loan officer last March, he’s already issued more small business loans than during his entire time in banking.
That’s because ProsperUs is a community development financial institution that offers tailored resources to local entrepreneurs. It’s a micro-lender that issues loans up to $50,000, especially for people who have less than ideal credit and may not be eligible for a traditional loan. ProsperUs also offers training and technical assistance to make business owners more bankable and set them up for long-term success.
We spoke with Bralock about his process for issuing loans, why banks may be reluctant to issue loans and some of the biggest challenges facing small businesses in Detroit.
This interview has been edited for length and clarity.
Outlier Media: What is the day-to-day work like for a loan officer?
Shakir Bralock: When someone applies for a loan, it gets assigned to a loan officer. So I reach out to them, and set up the time for us to spend 30 minutes to an hour just talking about their business, talking about ProsperUs and what we do and the next steps for their own application. During that time, I get the business plan and start collecting financial documents, balance sheets, tax returns, all of those things. And I start to then put together a presentation that I then present to a committee the last Friday of every month.
It doesn’t always go that fast because, many times, entrepreneurs need technical assistance. So another part of my job is connecting them to professional service providers, whether it’s a CPA (certified public accountant), a real estate or marketing professional, an attorney to help with lease agreements or land copyright issues. Beyond just helping them get the capital, I spend time really trying to figure out how I can support them so that after they receive the funds, they can continue to be in business for a long time.
You used to work in banking. How does your current job differ from your old one?
We’re very unique in that we specialize in training, lending and technical support. When I was in banking, someone would apply for the loan, but if they didn’t have the credit or collateral, then we would just decline it right there. I didn’t have any ability to refer them to a bookkeeper or another technical service provider.
But at ProsperUs, we have a 12-week training program where the entrepreneur learns how to put together a business plan with financials and projections. So we’re unique in that we have all three of those components — training, lending and technical support. We’re very flexible and radically supportive. We can approve loans that traditional banks would consider high risk.
So in the 13 months that I’ve been with ProsperUs, I’ve approved more loans than I did during the 15 years I was in banking.
Why are banks reluctant to issue small business loans?
It’s just been a history of any inequity and insufficient support for a lot of moderate income entrepreneurs of color.
Like I said, these businesses need technical services and training to become bankable. But banks aren’t designed for that because they’re a for-profit business with shareholders. So they do a ton of business loans, but only for individuals who have the collateral and the credit. Owners that haven’t had the same level of access to capital and resources are the ones being declined by banks.
What are some of the biggest challenges facing small businesses in Detroit today?
Obviously, capital. But in addition to that, finding a viable location.
Many times, entrepreneurs have to lease because they may not have the resources to buy a commercial building. Then they find themselves having to totally renovate a building that isn’t even white-boxed. And so they’re putting a ton of money and resources into a building that they don’t own. And if, God forbid, it isn’t successful, they’ve in essence added equity to the landlord because they did the build-out.
But if you do find a viable location, then you have a bigger lease payment.
What are some of the ways ProsperUs, the city and other stakeholders are working on this issue?
There’s no quick fix in Detroit because you’re talking about years and years of disinvestment. But there are a couple of things in the works.There’s Motor City Match, which offers grants for individuals that want to have a brick-and-mortar business. It’s a highly competitive application process, but it is a way to get some additional money. ProsperUs and other organizations are working with local commercial real estate brokers to find out who certain landlords are and negotiate with them on behalf of entrepreneurs to help them fix up their building so it can have a tenant.