In July, Forbes magazine named Madison the third best city for young professionals, projecting it will experience a healthy growth rate in the upcoming years. Now, 11 UW-Madison students are working to help provide funding for entrepreneurs who have come to the city to launch their business dreams.
In September 2010, students Alex Rosenthal and Andrew Tapper created a business model to provide micro-loans for entrepreneurs and small business owners in Madison, which they then launched in June.
The significance of the business is not only the amount of money it provides, because loans average about $1,500, but also to whom it provides the loans.
“We aim toward providing entrepreneurs and small business owners with funding for their business activities,” Rosenthal said. “Specifically we aim toward those who are under-banked, underprivileged, under-educated and many times have poor credit history or no income [or] no steady employment; they’re facing some sort of roadblock in finding funding for their businesses.”
The business, called The Madison Fund, is entirely run and operated by students.
“These are students who are very passionate about what we’re doing and they’re excited and they really want to see us grow and succeed,” he said.
While providing loans is one of the business’s objectives, Rosenthal said it also gives guidance to clients with underdeveloped business plans or those who do not know how to execute their business model.
“Whatever it is that they come to us with, we are prepared to help them with financial assistance, technical assistance and their funding problems,” he said.
Rosenthal said Madison is a good location for the business given its large population of under-funded and unemployed citizens seeking employment after falling victim to a difficult economy.
He said the expansion of small businesses not only benefits the business owners, but also the entire economy of Madison.
“[Business expansion] is a good thing because that will help the economy in turn. Small businesses employ and we’re hoping that through the provision of credit, these people will help them create jobs in Madison.”
Rosenthal said he expects The Madison Fund will provide between 10 and 20 loans next year.
“I think we’re going to meet a lot of successes in the next 6 to 12 months. I think we’re going to see a demand that’s exploding.”
While Rosenthal said the company is considering expanding its current funding from private donations to corporate donations and taking investments, Rosenthal said its main focus is still reaching out to students and community members for money.
“A little bit of money can go a really long way,” he said. “If 100 people give a $10 contribution to the Madison Fund, that’s $1,000 and we have found demand for $1000 loans so that can make a huge difference.”
