Home Savings Donation Gives MVEDC an ‘Edge’
YOUNGSTOWN, Ohio — A $25,000 donation from Home Savings Bank will help the Mahoning Valley Economic Development Corp. assist economically disadvantaged populations get funding to start new businesses.
Home Savings Bank presented the check to MVEDC Thursday. The funds will be used for the Economically Disadvantaged Growing Entrepreneurs, or Edge, Revolving Loan Fund. The Edge fund was created to help those who are economically disadvantaged be able to obtain a small business loan.
The $25,000 is part of the $400,000 local match for the loan fund, which began with a $1.6 million grant from the U.S. Department of Commerce Economic Development Administration in December, said Teresa Miller, executive director of MVEDC.
Since then the grant was announced late last year, MVEDC has received applications for the loans. In January, the organization assembled a loan committee that met for the first time in February and ended up approving two of the applications, Miller said.
“One of which, we’re actually in the process of trying to close in the next couple of weeks,” Miller said. “We’re moving right along.”
Home Savings has had a long standing partnership with MVEDC, says its senior vice president of commercial banking, Josh Toot. The $2 million revolving loan fund will help create and maintain jobs, while helping businesses grow, he said.
“We thought it was a great use of funds in the community. We will see a direct correlation of the money we give and the effect it has on the local, small business community,” Toot said. “It’s a great match on what we’re looking for to build the community and what MVEDC does.”
Typical loans have a five-year term, Miller said. If a building is involved, a loan can be stretched out to 15 years, because it’s usually the life of the collateral that MVEDC is acquiring, she said. Loan rates are between 6% and 7%, she said.
Just having an idea isn’t enough for loan approval, she said. Applicants must have a good business plan in place, as well as financials and projections on how they will be profitable to pay back the loan. Individuals can learn more about the application process and apply for a loan at MVEDC.com.
Ideal applicants are those who for one reason or another might not qualify for a typical commercial loan through a bank. Because MVEDC has fewer regulations than a bank, character can be taken more into account, Miller said.
“Other than that, we’re just looking for someone who has a good, sound idea and they just have one or two issues that make them not be able to fit in the regulations of a bank,” she said. “We can help them get two years under their belt and then they can turn around and become bankable.”
Home Savings works with MVEDC by referring customers who don’t qualify for a bank loan, but still fit into MVEDC’s regulations, said Home Savings’ Toot. The bank contacts MVEDC once or twice monthly with possible referrals, he said.
“Sometimes it’s a new business or they’re not at the point where they qualify for a conventional bank loan, and that’s where MVEDC comes in with all of their loan programs and how they do partnership with banks,” Toot said. “Sometimes we both do a partnership and do a loan or it’s just MVEDC to help businesses grow.
“We have a long history using their programs and utilizing what they can do for us. So when the client comes to Home Savings, we know when it fits the programs they offer,” he continued.
The challenge for MVEDC in 2020 is to raise awareness of the program and get more people in to apply for the loans, Miller said. Working with Home Savings helps that goal.
“Home Savings definitely has a heart for us and we have a heart for them,” Miller said. “We’re blessed to have this opportunity.”
Pictured: Josh Toot, senior vice president of commercial banking at Home Savings Bank, presents a $25,000 check to Teresa Miller, executive director of the Mahoning Valley Economic Development Corp.
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