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How can established small businesses- not startups- get access to capital?

Running a small business is never easy. Even after 11 years, Allegra Derengowski can’t count the number of financial challenges she faces.

As the founder of Birchtree Catering, which runs out of a shared space in Frankford, Derengowski said she’s constantly trying to scrape together enough cash to cover things like paying off her startup debt or hiring experienced staff.

“That’s kind of a trap that a small business can fall into,” she said. “We didn’t start with any capital, we just built it up. So we’re just trying to make it work.”

Derengowski knows others are in the same boat. Embedded in Philly’s community of entrepreneurs, she’s on the board of the Sustainable Business Network, a graduate of the Goldman Sachs 10,000 Small Businesses program and an alum of various courses at the Enterprise Center in West Philly.

Through all of this, she’s noticed a phenomenon that she finds problematic:

There seems to be a lot of funding available for small business “growth,” but what about those who have struggled to learn the business and need financial help to keep surviving?

Derengowski submitted that question to Billy Penn via Broke is Listening, our series asking people what they wonder about economic mobility in the city.

In advance of the Broke in Philly reporting collaborative’s free event called Funding the Hustle, set for Thursday, July 18, at the University City Science Center’s Venture Cafe, we explored Derengowski’s question.

Here are some answers, and a list of ways for established biz owners to access capital they need.

If it’s not ‘new and exciting,’ financial help is hard

Do startups have access to more independent funds than already-existing businesses?

Judy Wicks, founder of the Sustainable Business Network, told Billy Penn she hasn’t personally noticed this phenomenon — but she wouldn’t be surprised if it were true.

“It probably is the case, that they don’t get the attention because it’s not new and exciting,” said Wicks, who launched the original White Dog Cafe and cofounded Urban Outfitters, back when the fashion behemoth was itself a small business. “It’s the sickness of the brand of capitalism.”

Wicks goes out of her way to support Philly’s stock of established shops. She runs the Circle of Aunts & Uncles, which offers low-interest loans and social capital to entrepreneurs that have been open for at least six months, no less.

Her program gives priority to women and people of color — sorely needed in Philly, which ranks ninth out of the 10 biggest cities for minority ownership.

“We try to support local entrepreneurs already building our economy,” Wicks said. “Those are the kinds of businesses I value.”

Another Philly program has a similar focus. The Merchant’s Fund offers “stabilization grants” from $500 to $10,000, only open for entrepreneurs that have been in the game for at least three years.

As one of few easy-to-find funding sources for toddler-aged businesses, the application process is admittedly crowded.

“There is no guarantee of an award,” the website reads. “We recommend that merchants explore other funding sources simultaneously to the grant application process.”

Are there any city funds available?

So the private grant game is competitive. What’s the city got to give?

Per Department of Commerce spokesperson Kevin Lessard, there aren’t really any public grants — for new or existing businesses. But there are other opportunities that might help:

And if you’re looking for something from the city that’s not on that list, you could try contacting a business services manager, who’s assigned to help businesses navigate city services. (They’re also bilingual, BTW.)

All that’s well and good, said catering company owner Derengowski, but she still wishes there were more general cash advances available for long-term businesses — instead of funding programs allotted for specific uses.

Still, she said, it’s progress.

“I will say I think the city has changed a lot in the last 10 years, in terms of having available resources,” Derengowski said. “Things are getting much much better than when I started out.”

Media Contact:

Kristen Fitch

Kristen Fitch

Senior Director, Marketing