A new grant program gives big aid to small Milwaukee food businesses

UpStart Kitchen added to its arsenal of services to help food entrepreneurs develop and sustain their businesses.

The two-year-old culinary incubator program already provides shared commercial kitchen space, business planning, marketing, and budgeting for emerging food entrepreneurs. Now, its parent company, Prism Economic Development Corp., has received a $50,000 grant to start a microlending program to help with upfront costs associated with starting a food-oriented business.

Tomira White, 42, welcomed the news. White has been with UpStart Kitchen since it opened in 2020. She wants to expand her catering company, Delicious Bites, into a brick-and-mortar storefront. She hopes the funds can help fulfill that dream.

“I’m excited it will help me in a lot of ways,” said White, of Milwaukee. “I've just been spending the last year dumping all my money into my dream here. Even if I could apply for this loan, it would help with employees (and) prepay kitchen time. I am gonna need more kitchen time because my demand will increase drastically.”

The grant was announced Thursday. Prism EDC received the grant from Cross River Bank, a New Jersey-based fintech company that provides financial services to other fintech and tech companies.

The funds will allow Prism to provide support for its 30 members. Prism will be able to provide small cash flow loans for licensing fees, labor, equipment, and the acquisition of food products needed for catering contracts. Many of these costs are incurred before a business owner ever sees one dollar of revenue from catering contracts.

“For small businesses, that could be a big hurdle,”said Leo Ries, associate director of Prism EDC. “For startup businesses, access to capital is a big issue.”

Most of its members start their businesses in their homes, but to run a legitimate catering company, selling food on a retail level, they need to be at a licensed facility.

Even to be part of UpStart Kitchen, there’s a $200 application fee and a $200 annual membership.

“This is just one more element of surrounding our members with a menu of support – technical assistance, connections, relationships. Now we can provide them with some financial help,” Ries said.

Tamesha Patrice, of Baked Dreams Creations, has been cooking since she was 10. The food industry typically has high overhead costs, especially for supplies and packaging, she said. For example, a single baking form can cost $70. She needs at least 10.

More:Upstart kitchen, in Sherman Park, has a line of entrepreneurs eager to start food businesses

“All the little things you see the catering company set out real pretty that cost them a lot of money - just think about that when you are hiring catering companies," said Patrice, 34. "It’s never just the cost of the food. It’s always so much more than that.”

Supporting UpStart Kitchen is part of Cross River’s mission of impactful giving.

Rural and minority communities don’t have access to capital and many small businesses don’t have a banking relationship, said Phil Goldfeder, Cross River’s head of Global Public Affairs.

“We are in this space of using innovation to reach more people, but I think what we realize is there is a world of small businesses and entrepreneurs that are simply left out of the traditional process in financial services,” he said. “It is our responsibility to step in where we can.”

Goldfeder wanted to partner with Prism and UpStart Kitchen because of its record of supporting small businesses, but knew its mission could be even stronger with a financial infrastructure.

“This is not just simply a grant to support their function,” Goldfeder said. “This grant has the potential to touch hundreds and hundreds of people for the next 20 years.”

The two companies’ paths crossed during the pandemic when the government rolled out its paycheck protection program (PPP). The program aimed to help businesses during the nationwide shutdown, but many small businesses were shut out of the program because they lacked that banking relationship.

But Prism was able to secure two PPP loans from Cross River.

Like most nonprofits, Ries said his organization was “prospecting for donors,” when it reached out to the foundation arm of Cross River inquiring about philanthropic opportunities. Ries called it a “hail Mary pass” to see if Cross River's philanthropic arm would consider supporting a nonprofit based in Milwaukee.

Impressed with Prism EDC's and Upstart Kitchen's mission, Cross River provided the grant.

“Perhaps it was divine intervention…,” Ries said. “Their philanthropic priorities are helping entrepreneurs and small businesses emerge and that’s basically what we are all about.”

Bishop Walter Harvey, president emeritus of Prism EDC, thanked Cross River for this partnership which enables the nonprofit to accelerate its vision. That vision, he said, is centered on faith, work, and economics.

“We had a dream of doing light food manufacturing as an economic development expression for entrepreneurs,” Harvey said. “Thank you for coming alongside with us.”

This article originally appeared on Milwaukee Journal Sentinel: UpStart Kitchen gets grant money to help small Milwaukee food businesses