by Caroline Gabsewics
Staff Writer
Since April, the city of Jacksonville’s Small and Emerging Business and Loan Program has already awarded four loans to businesses to help them bridge the gap between starting a contract and making the first payment.
The loan program that began on April 6 is used to help businesses in the Small and Emerging Business Program (JSEB) be successful and grow in today’s marketplace.
Kevin Holzendorf, policy director for the mayor’s office, said they are looking to raise $1 million to be used as loans to distribute to qualified businesses doing work for the City. To raise the money, the City created an access to capital loan pool.
“We went to the financial community and asked them to participate, and they became very interested,” said Holzendorf.
Currently Wachovia is the leader, donating $200,000 to the loan program. Other banks who have stepped forward include The First Guaranty Bank of Jacksonville, EverBank, CenterBank of Jacksonville, Bank of America, AmSouth Bank and Prosperity Bank.
“We have raised $425,000 from the banking community and the City is matching that with $350,000,” said Holzendorf.
The four key areas the JSEB program provides assistance to are: access to capital, bonding, educational programs and finances. The access to capital loan pool was created because it was a need that was brought to the City’s attention by the community.
“JSEB is all about building capacity, helping small emerging businesses grow,” he said. “Businesses need to be able to go out in the private sector and not just depend on the City.”
Devin Reed, director of the Department of Procurement, said this loan program gives small businesses an opportunity to make it through the first month or two.
“Small businesses have a tough time bridging that gap,” he said. “If you are awarded a contract with the City, you are potentially a candidate to receive loans from the loan pool.”
By taking advantage of this loan opportunity, the business will be able to establish a payment history.
“Once they are able to establish that (payment history), chances are we will be able to refer them to a traditional lender,” said Reed. “People that have been afraid to do City work are now encouraged to solicit a contract to be qualified to receive a loan.”
Holzendorf is hoping businesses apply for the loan once and then they will be able to go to banks for future loans.
“It is easier to get credit once you’ve got credit,” he said. “The one issue most banks require is two years financial history, so it is hard for businesses to get loans.”
That is a reason why the City came up with the program, to help get businesses comfortable with the process.
“Businesses have been responding very well and we are getting positive feedback,” said Holzendorf. “It gives them experience to apply for a business loan in a safe environment. I am excited about the positive results we are getting at this early stage.”
Holzendorf said they make sure they reach out to everyone to be a part of the JSEB program. Currently there are 394 businesses in the program .
Senior Vice President at Bank of America, George Owen, said the bank thinks the program is good for small and emerging businesses and therefore it is good for the community.
“We think it is an important program for the community,” he said. “We had made a decision not to contribute, but we went back and did a reassessment and decided clearly that it is an important program.”
Bank of America contributed $125,000 to the loan program earlier this month.
The program in turn also helps the banks, because more businesses create more jobs, he said.
“It is a win-win situation, for the banks, businesses and the community,” said Owen.
Both Holzendorf and Reed appreciate what Mayor John Peyton has done for the program.
“Every chance I get, I thank Mayor Peyton for letting us think out of the box,” said Reed.
Holzendorf added that he appreciates what the banks have given towards the program, and Peyton’s participation and commitment to the program.
“The city of Jacksonville is in a better position for those in JSEB. They can start a job and start it well,” said Reed. “It is already starting to be a great project and it will continue to be.”