JobsOhio, Home Savings Partnership Expands Lending for Businesses

YOUNGSTOWN, Ohio — A new partnership between JobsOhio, First Federal Bank of the Midwest/Home Savings Bank, as well as Peoples Bank in Marietta, will make up to $50 million in loans available to Ohio small businesses.

During his daily briefing, Gov. Mike DeWine announced the JobsOhio Small Business Loan program “will help small businesses maintain operations and payroll during the COVID-19 pandemic,” he said. The funds will be used to support existing Ohio-based small-business clients of those banks by increasing their lending capacity by up to $200,000 per business.

“This assistance will bolster each bank’s ability to provide additional financing on favorable terms for local businesses in good standings,” DeWine said. “Small businesses that would otherwise not be able to access this credit due to the COVID-19 virus.”

Eligible businesses can use the loans for working capital, payroll, rent, mortgages or other fixed debts, utilities and other bills, he said.

To be eligible, applicants must be customers of the participating banks in good standing, either from a borrowing or depositing standpoint.

Loans are available for up to $200,000 at the prime rate, which is currently at 3.25%, said Gary Small, president of Home Savings Bank and First Federal Bank. There are no origination fees and loans are available for a 35-month term, the first six of which are interest only, then 29 with principle and interest using 60-month amortization.

Additionally, applicants cannot already have more than $1 million of committed lending from the bank, he added. If a customer has $800,000 in committed lending and another $300,000 on the way from the federal government’s Paycheck Protection Program, the federal money doesn’t count to the $1 million threshold and they can still apply for the $200,000 through the JobsOhio program, he said.

“This is a true small-business program,” Small said. “With a maximum loan amount of $200,000, low rate and no fees, it will be beneficial to small-business owners in our area.”

The loan program is intended to provide assistance to businesses that would otherwise have difficulty being approved for a loan with reduced or no current revenue, Small said.

“So many businesses right now have no revenue because of the virus,” he said. “It would be difficult to make a lending decision to a business that was in that state.”

Under the JobsOhio Small Business Loan program, businesses do not have to prove current revenue levels, he said. “It’s kind of understood if you have a need, this is a tough time to be securing money,” he said. Because the state is backstopping the loan, it eliminates a bank’s hesitation over a business’ inability to pay.

This comes as the federal government approved a $310 billion refill of the Paycheck Protection Program, which exhausted its coffers of $349 billion after 13 days. Although the JobsOhio loans differ from the Paycheck Protection Program in that they eventually must be repaid, the state program is another source of liquidity for businesses trying to stay afloat, Small said.

Another benefit to the JobsOhio loan program, Small said, is that businesses in the southern and northern parts of the state that aren’t in large metro markets would have access to the capital. About 80% of First Federal/Home Savings Bank’s business is in non-metro areas, and “I think that was purposeful to assure the funds were available in markets” that aren’t always served by these types of programs, he said.

Of the total amount committed by JobsOhio, the Mahoning Valley will “see a very strong portion of this money,” to the tune of $25 million, he said.

With the JobsOhio partnership, First Federal/Home Savings Bank will be in a strong position to assist its small businesses clients across the northern half of Ohio, said Don Hileman, CEO of First Federal Bank of the Midwest.

“We commend JobsOhio for creating this program to assist Ohio’s small businesses that are so vital to our communities,” Hileman said in a release. “We’re proud to be able to support the program and our business customers during this time of need.”

“JobsOhio’s partnership with Peoples Bank, First Federal and Home Savings Bank will support efforts to sustain Ohio small businesses as they confront unprecedented challenges from COVID-19’s impact on our economy,” added J.P. Nauseef, JobsOhio president and CEO. “First Federal Bank, Home Savings Bank and Peoples Bank are Ohio institutions supporting Ohio businesses. We are optimistic this effort will provide businesses the assistance they need to navigate this crisis.”

For more information on the loan, visit Homesavings.com/covid-19.

DeWine also updated the status of the $1.6 billion dividend approved by the Ohio Bureau of Workers’ Compensation. The first checks were mailed out Monday, and a total of 170,000 checks will be mailed over the next five days, he said.

“The check is in the mail,” he said.

The dividend equals roughly 100% of premiums employers paid in policy year 2018. About $1.4 billion will go to private employers, with the rest going to local tax districts such as counties, schools and municipalities .

Copyright 2022 The Business Journal, Youngstown, Ohio.