By Jeremy Allen, Executive Editor
For 25 years, the Detroit Development Fund has quietly done the kind of work that rarely makes headlines but often changes lives.
Before national retailers carried The Lip Bar products on their shelves, before founder Melissa Butler became one of Detroit’s most celebrated entrepreneurs, she was driving a lipstick truck around the country trying to prove her concept could work. Before Carla Walker-Miller built one of Michigan’s largest Black woman-owned businesses, she was searching for financing to grow an energy services company few traditional lenders were willing to back.
Detroit Development Fund said yes.
Now approaching its 25th anniversary, the nonprofit lender says it has invested more than $100 million into Detroit small businesses – including more than $40 million specifically through its Entrepreneur of Color Loan Fund – helping Black-owned companies, women entrepreneurs and neighborhood businesses gain access to capital often unavailable through traditional banking systems.
“We are a nonprofit,” said Ray Waters, CEO of Detroit Development Fund. “We provide growth capital loans, grants and technical assistance to small businesses in the city of Detroit who are unable to get bank financing. What our goal is to do is take small companies and not just finance them, but figure out ways that we can help them continue to grow.”
That mission has made the organization one of Detroit’s most impactful and least publicly visible economic development institutions, according to its leadership team.
“I feel like Detroit Development Fund is the best well-kept secret in the city of Detroit,” said Deborah Jones, the organization’s chief operating officer. “We have made a tremendous impact over the years, but we haven’t been one to toot our own horn that much. We’ve been more interested in getting the loans out there, making sure that we’re making an impact, making an impact as it relates to the jobs that are created.”
According to DDF leadership, nearly 95% of loans made through the Entrepreneur of Color Loan Fund have gone to Black-owned businesses. About 48% have gone to Black women-owned companies. The organization says its lending has also helped reactivate hundreds of thousands of square feet of previously vacant commercial property across Detroit neighborhoods.
“We’ve been more interested in getting the loans out there and making sure we’re making an impact,” Jones said. “Making an impact in terms of jobs created, in terms of previously empty buildings that are now occupied by Black-owned businesses, and businesses that are now providing tax revenue and services back to the city of Detroit.”
The organization’s work comes at a time when many Black entrepreneurs continue to face systemic barriers to accessing capital. National studies have repeatedly shown that Black business owners are denied loans at higher rates than white counterparts and often receive smaller amounts with less favorable terms.
That reality has made relationship-building central to DDF’s approach.
“There has been a high distrust out there,” Jones said. “A lot of people have been denied. One of the things that DDF portrays is that we are here to build a relationship with you. We are a partner with you in your business. We’re not just a lender trying to check off a box.”
Unlike many lenders, DDF leaders say they work with entrepreneurs even when they are not immediately loan-ready. The organization provides technical assistance grants to help business owners prepare financial statements, strengthen bookkeeping practices and develop business plans.
“We don’t just leave them out there,” Jones said. “Even if it’s not right now, we let them know what they need to do to become loan-ready. We’ll provide grants, we’ll connect them with service providers, and we’ll help them get where they need to be.”
That support can range from microloans as small as $1,000 to larger loans up to $300,000, depending on the business’s stage and needs.
Senior lender Kevin Sweeney said the organization has increasingly focused on meeting entrepreneurs where they are through direct community engagement.
“Our whole entire team has been out in the marketplace,” Waters added. “We’ve been at various events. I think this week alone our team had already been to about 12 events just talking to people, getting the name out there, spending time with small companies and letting them know what we do and how we can help them.”
DDF has also become active in Detroit’s growing tech ecosystem, particularly among Black entrepreneurs building startups in emerging industries. Through partnerships connected to Venture 313 and Black Tech Saturdays, the organization has helped provide both lending opportunities and startup support to founders often overlooked by traditional venture capital networks.
“We think it’s very important,” Waters said of Detroit’s growing Black tech scene. “We’re seeing a lot of emergence coming through Venture 313, and it allows us as a lender to provide small loans or larger loans to tech companies while other partners can make equity investments into those companies.”
At the same time, DDF continues to support more traditional small business sectors that remain vital to Detroit’s economy, including restaurants, contractors and neighborhood retail operations.
Waters said one growing area involves small contractors working on Detroit’s expanding affordable housing and redevelopment projects.
“They get a contract to do electrical work or plumbing work, but they don’t have the money to buy materials,” he said. “So we provide a line of credit to help them do the job. Then when they get paid, they pay the line of credit back and move on to the next project.”
The organization’s community-centered approach also extends to its lending philosophy.
As interest rates have climbed nationally, DDF leadership said they made a deliberate decision not to raise rates beyond 10%, even as many online lenders and alternative financing companies charge substantially more.
“We made a decision that we would not go over 10% on our interest rate,” Waters said. “You see these online lenders saying, ‘Get a business loan in 24 hours,’ but many of those loans are predatory. Some are 20% or 22% interest. A lot of companies are jumping on them to get quick money, but at the end of the day, those loans aren’t helping them.”
The nonprofit model, however, comes with challenges — particularly as federal and philanthropic funding landscapes continue to shift.
DDF receives some support through the federal Community Development Financial Institutions Fund and the Michigan Economic Development Corporation, but leadership said much of its funding historically has come from private foundations, including the Kellogg Foundation, Ford Foundation and Gilbert Family Foundation.
Now, amid changing political dynamics surrounding diversity, equity and inclusion initiatives, Waters acknowledged that some funding streams may become more difficult to access.
The organization recently applied for federal CDFI funding but has refused to change the name of its Entrepreneur of Color Loan Fund despite shifting federal scrutiny around race-conscious initiatives.
“The Entrepreneur of Color Fund is what we are and who we are,” Waters said. “We are not going to change the name. It may mean we don’t receive some federal funding, but we like what we do, and it’s who we are.”
Even so, DDF leaders say they remain committed to their mission and optimistic about Detroit’s entrepreneurial future.
For Sweeney, who previously worked in major banking institutions before joining DDF, the work carries a deeper sense of purpose.
“The most value I get is helping organizations with owners that look like me and are in the city,” he said. “I live in the city, I play in the city, and I get a lot of intrinsic value out of being part of the resurgence and helping people I work with and live around every day.”
DDF leaders say their goal remains helping local entrepreneurs survive, grow, and create generational impact in the communities they call home.
“That’s why we do what we do,” Waters said. “Every day I walk in thankful that we have a team of people who really care about Detroit and want to see the companies we work with grow. At the end of the day, we can be satisfied helping companies grow, helping create jobs for Detroit residents, and helping fill these empty spaces across the city.”
