MVEDC Gets Grant to Start $2M Revolving Loan Fund
YOUNGSTOWN, Ohio – Local entrepreneurs will have access next year to a new $2 million revolving loan fund at the Mahoning Valley Economic Development Corp.
U.S. Rep. Tim Ryan, D-13 Ohio, announced Tuesday that the U.S. Department of Commerce Economic Development Administration has awarded a $1.6 million grant to MVEDC to establish the loan fund, which will be matched by $400,000 in local funds. The fund is expected to help create 200 jobs, retain 55 jobs, and generate $9 million in private investment.
The Economically Disadvantaged Growing Entrepreneurs, or Edge, Revolving Loan Fund will provide access to working capital and provide a new source of commercial financing “in areas impacted by the closure of a prominent automotive plant,” according to a notice of investment award from the Commerce Department. Its objectives include supporting women and minority-owned businesses, promoting economic diversification, creating jobs and strengthening the regional economy.
The Edge fund will provide financing for economically disadvantaged populations who have difficulty getting traditional bank financing, including but not limited to women and minorities, in Mahoning and Trumbull counties, said Teresa Miller, MVEDC assistant executive director, who will succeed Mike Conway as executive director Jan. 1.
MVEDC’s existing loan programs were overextended and the agency saw a need to help members of economically disadvantaged populations, Miller said. She worked with local financial institutions and Common Wealth Inc. to assemble the $400,000 local match.
“Our hope is that we’ll be able to help get them off the ground, and they’ll grow and expand and build that relationship with those financial institutions,” she said.
The Edge fund will “serve a sector of our economy that really needs support,” Conway added.
The federal investment comes at a “critical time” for the Mahoning Valley and the region, Ryan said in announcing the grant. He praised Conway and his team at MVEDC for “vision and persistence” to capitalize the program and the Economic Development Administration for “seeing the merit” in the application.
“The Trump Administration is committed to helping Ohio’s economy prosper,” Commerce Secretary Wilbur Ross said in the announcement. “This new [revolving loan fund] will help diversify and boost northeast Ohio’s economy by providing the critical gap financing businesses throughout the region need to grow and expand.”
Revolving loan programs primarily are used to develop and expand small businesses, and the nation’s 30.2 million small businesses account for the vast majority of all U.S. businesses, Ryan noted.
“By focusing our attention to help small business grow, we can foster our local economies keeping money close to home and support our neighborhoods and communities,” he continued.
“Access to capital is the biggest challenge that small businesses face” and the Edge fund provides “another tool in the toolbox,” said Barb Ewing, CEO of the Youngstown Business Incubator. “It’s definitely an avenue of growth.”
YBI operates the Women in Entrepreneurship program and houses the Ohio Minority Business Assistance Center for the Youngstown region. Women-owned and minority-owned enterprises often face unique challenges, in part because women and minorities have been underrepresented historically in home ownership, which is “a key component” to building wealth and establishing credit, she said.
Sarah Boyarko, chief operating officer of the Youngstown/Warren Regional Chamber, said the chamber looks forward to working with MVEDC and small businesses in the region as it moves forward with the program. The fund provides “an additional resource” in its loan portfolio, she said.
“Startups and entrepreneurs are often challenged in qualifying for the existing loan programs that are available through traditional funding sources,” Boyarko said. “MVEDC always does a nice job of packing financing to best support each company’s needs.”
Other government officials weighed in on the grant award.
“I applaud the Department of Commerce for awarding the Mahoning Valley Economic Development Corp, a $1.6 million grant to help establish the Economically Disadvantaged and Growing Entrepreneurs fund,” said U.S. Sen. Rob Portman, R-Ohio.
Not only will the funds help create and train employment opportunities, but it also targets Opportunity Zones and new market tax credit investments, two initiatives Portman worked to have included and passed as part of tax reform, he said.
“This fund will focus its loan-making to assist in the growth of minority and women-owned businesses in Mahoning and Trumbull Counties, and the project’s location near a Tax Cuts and Jobs Act Opportunity Zone will help to drive private investment into the region,” said John Fleming, U.S. assistant secretary of commerce for economic development.
“Continued investment in our small businesses will strengthen Ohio’s economy,” Ohio Gov. Mike DeWine added.
MVEDC should have the funds available to begin lending to borrowers in the first quarter of 2020, Miller said. Guidelines, prepared as part of the grant application, already are in place.
“It’s important that every hard-working person with a great idea that wants to become an entrepreneur has the same chance as everybody else,” she said. “MVEDC wants to see the local economy grow and flourish through business and job creation in every area of the Valley.”
Copyright 2020 The Business Journal, Youngstown, Ohio.
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