Disney Bolsters Loan Fund for Inner-City
Responding to what inner-city activists consider one of South-Central Los Angeles’ most pressing needs, the Walt Disney Co. is raising $1 million for loans to small business owners unable to obtain conventional bank financing.
Disney’s contribution will provide initial financing for a First African Methodist Episcopal Church program that will offer loans of $2,000 to $20,000 to community residents who own or are starting a business in the inner city.
“We’re trying to reach out to that segment of the community that’s not being addressed,” said Kenneth D. Werner, a Disney senior vice president who is leading the company’s efforts. “We’re hoping that if 30 or 40 businesses are created or allowed to exist, the community will be a better place.”
Werner said the loans--to be repaid at a fixed interest rate of 5% within five years--are aimed at people who have been rejected by banks because of where they live or their lack of collateral.
The mid-city church hopes that other corporate, bank and individual gifts will boost the loan fund to $10 million before the turn of the century, said the Rev. Cecil Murray, First AME’s pastor.
Disney’s commitment was praised Friday by Mayor Tom Bradley.
“Small entrepreneurs will have the hardest time getting back on their feet, so I hope other companies eagerly follow the path being paved by Disney,” Bradley said. The city has agreed to provide half of the funds for some loans issued through the program.
Recipients of the loans will be selected by a multiracial First AME loan committee, said Mark Whitlock, executive director of the church’s FAME Renaissance Project.
Each will be required to attend a 10-week entrepreneurship training program at USC, Werner said. First AME, drawing on its 8,500 members, also will provide volunteer “mentors” to advise loan recipients and monitor the progress of their businesses.
Ideally, Werner said, the loan recipients will “feel an indebtedness to the community,” and repay on schedule so that the money could be lent to others. In addition, black-owned Founders National Bank has agreed to buy loans from certain credit-worthy participants, and a Korean-American-owned bank may play a similar role, Whitlock said.
Such “micro-loans”--versions of which also are being offered by the Small Business Administration, the cities of Los Angeles and West Hollywood, the area’s black-owned banks and some nonprofit groups--help businesses too small or unsteady to qualify for traditional bank lending.
Disney’s loan contribution was announced in a letter sent to the Burbank-based company’s 25,000 West Coast employees.
Top Disney executives Michael D. Eisner and Frank G. Wells told the workers that the company will match each dollar they contribute, with a goal of raising $1 million. Employee and corporate contributions to the loan program will be tax-deductible, said Disney spokesman Erwin D. Okun.
“Every penny of the $1 million will go to loans and not to overhead,” Eisner and Wells wrote the employees.
“The riots may have been isolated in Los Angeles, but their images of anger and despair were seen as a reflection of all of Southern California,” the letter said. “We are determined to not stand idly by in the misguided belief that the problems of Los Angeles stop at the studio’s gates or Disneyland’s berm.”
Murray said: “We have been formulating such plans over the years. They were brought to focus sharply by the necessity that the power structure now senses along with us. Essentially, the rebellion helped to make high visibility to others what was already high visibility to the community of need.”
