Southland Partnership Aims to Turn Contracts Into Growth for Minority-Owned Businesses (Tinley Park, IL) — Winning a construction contract is one challenge. Having enough cash to pay workers and keep the project moving before the first payment arrives is another.
A new partnership between the Southland Development Authority and the Steans Family Foundation aims to help minority-owned businesses close that gap — pairing access to working-capital financing with support to manage growth. For the foundation, that investment comes with a specific expectation: creating jobs for North Lawndale residents.
Announced Sept. 4, the partnership will launch with a two-part event series introducing business owners to financing opportunities, including working-capital loans ranging from $100,000 to $500,000. A virtual session on Sept. 16 will be followed by an in-person gathering in October connecting vetted contractors with capital partners and developers.
The effort addresses a problem that can persist even when a company has customers, skilled workers and signed contracts.
“You’re not necessarily paid immediately at 30 days, but you still need to pay your workers every week,” said Andrew Witherspoon, who works with the Steans Family Foundation on business investment. Contractors may need enough money to cover several weeks of payroll before receiving payment for their work, he said.
Bonding requirements can add another strain. Witherspoon said smaller firms without substantial assets to offer as collateral may have to commit cash to secure the bonding needed for a project, tying up money they would otherwise use to operate the business.
Emmanuel Davila of the Southland Development Authority said some business owners reach that point after already putting much of their personal wealth into their companies. He described entrepreneurs who have tapped retirement accounts, drawn equity from properties and invested their life savings to get established. Others have reached their borrowing limits, leaving them unable to finance another job while waiting to be paid for existing work.
“Our goal is to accelerate the deployment of critical capital to minority-owned construction firms that have the pipeline but lack the working capital or bonding capacity to scale,” Davila said in the partnership announcement.
Financing tied to job creation
For the foundation, success will be measured by more than loan repayment.
Witherspoon said investments carry employment agreements requiring businesses to hire North Lawndale residents. The hiring commitment is linked to the amount of capital provided, making employment a condition of the investment rather than simply an anticipated benefit.
A business that returned the money but created no jobs would not represent a successful partnership, he said.
That focus connects the SDA’s work with businesses in Chicago’s south suburbs to the foundation’s investment priorities on the city’s West Side.
Although the announced event series centers on construction, Witherspoon emphasized that the foundation’s broader investment work is not limited to contractors. Manufacturing and food production businesses are also part of its interests, particularly where investment can support additional employment.
Nor must a business be based in the Southland. Witherspoon said North Lawndale and West Side businesses receive priority, but the foundation is open to working with companies elsewhere that want to grow and will hire residents of its priority community.
“This partnership is rooted in our commitment to creating quality jobs for residents on the South and West Sides, particularly in North Lawndale,” Leo Smith, a Steans Family Foundation trustee, said in the announcement.
Looking for businesses ready to expand
The financing is intended primarily for established companies with work to perform, not businesses seeking money without a clear plan for using it.
Witherspoon said candidates should have contracts already secured and be able to explain how financing would help fulfill them. Those contracts would be reviewed as part of the evaluation process.
He described strong candidates as companies with technical expertise, an operating history of at least three to four years and healthy operating margins — or a clear explanation of the barriers affecting those margins. The owner’s willingness to learn and take on the demands of a larger business also matters.
Witherspoon pointed to businesses doing roughly $2 million or more in revenue as better positioned to meet the employment commitments associated with the financing than much smaller operations. Not every owner wants the additional employees, projects and management responsibilities that expansion brings, he noted.
Through the outreach, he hopes to identify three to five businesses ready to move forward. Other firms engaged through the foundation’s work have first needed assistance organizing their books or improving operations before they were prepared for larger amounts of working capital.
The SDA’s role is primarily to connect businesses with capital and opportunities, rather than invest its own money in this initiative. It also stands ready to provide technical assistance to qualifying businesses, the interview participants said.
That assistance can include accounting practices, separating personal and business finances, and preparing the documentation lenders require — work intended to make financing both more accessible and more manageable.
The $100,000-to-$500,000 opportunities outlined in the announcement are working-capital loans, not grants. Specific interest rates, repayment schedules and an overall funding total for the partnership were not provided in the announcement or interview.
Two events, with longer-term ambitions
The Sept. 16 virtual “Power Hour” will introduce the foundation’s capital strategy, explain what makes a strong candidate and explore how financing can support operations and bonding capacity. The session will also address longer-term investment opportunities, according to the announcement.
The October gathering, planned for Chicago’s Southwest Side, will bring vetted contractors together with capital partners and developers managing active project pipelines. Organizers also plan a fireside discussion featuring businesses that have used these resources to grow.
The partnership builds on an existing working relationship. Witherspoon said a company introduced through Davila had previously received funding. Davila said a previously referred business is expected to discuss its experience at the October event, while the new group of participating firms had not yet been selected at the time of the interview.
Beyond the initial financing, Witherspoon said the foundation will look for stronger financial reporting, improvements in business systems and successful completion of the projects the money was intended to support. A company that demonstrates progress and repays its financing could be considered for a larger investment tied to further growth and hiring.
Interested business owners can contact the SDA or the foundation to discuss their financial records, existing work, growth plans and ability to meet hiring goals. Registration information for the September session is included in the partnership announcement; additional details about the October gathering will be released through the SDA’s newsletter.
For Davila, the broader goal is to help companies move beyond the point where basic business advice is enough. Access to money matters, he said, but so does knowing what to do when more work, more employees and more responsibilities arrive.
“It’s one thing to get capital, it’s one thing to get jobs, but it’s another thing to know how to manage all of that,” Davila said.
Southland Partnership Aims to Turn Contracts Into Growth for Minority-Owned Businesses
