Creative Business Fund offers financial assistance

Creative businesses in need of financial assistance in Pennsylvania may be eligible for a loan from the Creative Business Loan Fund through the Pennsylvania Council on the Arts.

According to the Pennsylvania Council on the Arts’s website, the loan is intended for small, creative businesses. In particular, the loan focuses on businesses owned by Black, Indigenous, or people of color or businesses located in rural or small-town areas.

“The overarching goal of the Pennsylvania Council on the Arts in this five-year strategic plan and moving forward is an emphasis on diversity equity inclusion,” Sarah Merritt, director of Pennsylvania Creative Communities, said. “[The Community Development Loan Fund] really aligned well with our plan and our goal moving forward.”

Norah Johnson, director of External Affairs and Public Awareness for the Pennsylvania Council on the arts, said that the loan is part of a larger strategy of providing funding to communities that have not historically received it.

“Recently, we distributed a press release about a revision to our general operating support strategy to prioritize BIPOC and rural arts organizations,” Johnson said. “That is done partially in a long-term commitment, ensuring that we address historical inequities in funding that we have participated in and contributed to.”

According to Merritt, the Creative Business Loan Fund was created by the Pennsylvania Council on the Arts, along with two Community Development Finance Institutions, Community First and Bridgeway Capital. According to the Department of Treasury Website, Community Development Finance Institutions serve to advance community development.

“CDFIs can be banks, credit unions, loan funds, microloan funds, or venture capital providers,” an infographic on the Department of Treasury’s website said. “CDFIs are helping families finance their first homes, supporting community residents starting businesses, and investing in local health centers, schools, or community centers. CDFIs strive to foster economic opportunity and revitalize neighborhoods.”

Merritt said the CDFIs played an important role in the development of the fund.

“Ultimately we met with the Community First Fund, which is the eastern part of the state, and they managed the loan fund for the eastern part of the state,” Merritt said. “On the western part of the state, they’re really just dividing the state in half, is Bridgeway Capital which would serve the Greene County region.”

Adam Kenney, director of the Creative Business Accelerator at Bridgeway Capital, said that Bridgeway Capital offers financial assistance to businesses in 15 counties across western Pennsylvania. He said that Bridgeway Capital, a non-profit lender, worked closely with the Pennsylvania Council on the arts in the development of the loan.

“Because of the CBA’s impact in and goals for the regional creative economy, in 2019 the PA Council on the Arts approached Bridgeway about the creation of the Creative Business Loan Fund. The PCA wanted to find innovative ways to support for-profit enterprises in the statewide arts and cultural landscape,” Kenney said. “CDFI’s were a good choice as they can make loans that are flexible, patient and mission-driven. The PCA elected to support the CBLF with Bridgeway and Community First Fund, a CDFI out of Lancaster, PA. Together Bridgeway and CFF will work to capitalize creative business growth across the state.”

According to Merritt, the Pennsylvania Council on the Arts provided a $250,000 grant for each region, and both CDFIs added $1 million to the fund. 

Kenney says that the fund is already helping businesses.

“Our first CBLF deal was to help the woodworking business, Eisenwood, purchase a larger CNC milling machine,” Kenney said. “The new equipment helps craftsperson Joe O’Connor take on larger client projects, which boosts the sustainability of his creative business.”

Kenney also said that the fund can show businesses that careful financing can be beneficial.

“When makers, artists, designers and craftspeople create businesses, they don’t always benefit from deep entrepreneurial knowledge. They might start with an MFA versus an MBA. This often leads to their perception of debt as a troubling thing, like crisis management with credit cards,” Kenney said. “The CBLF shows them that financing, when used strategically and responsibly, can be catalytic in their growth and get them closer to realizing creative fulfillment and financial success.”

Johnson said the Creative Business Loan Fund helps keep the arts sector healthy, which will help Pennsylvania recover from the pandemic.

“One of the things we are trying to work to ensure doesn’t happen is hollowing out of the arts and culture sector in Pennsylvania, whether that is non-profit or for-profit because of the pandemic,” Johnson said. “Even though we are not talking about billions in dollars in terms of relief, it still plays a role in helping to support those creative small businesses as they work to get through and get to the other side of the pandemic.”

In the meantime, Merritt hopes that the Creative Business Loan Fund can help the Pennsylvania Council on the Arts lead the way in promoting fairness in funding.

“We want to be the example. We want organizations that we grant to, that we help support across the state to know and understand the value of this work, in ensuring diversity, equity and inclusion,” Merritt said.