The University of Arkansas at Pine Bluff and the City of Pine Bluff say their joint micro-loan fund has been successful in spurring local economic development.
The UAPB/City of Pine Bluff Micro-Business Revolving Loan Fund has been operating just over a year. With a zero default rate, the program, capitalized at $140,000 with equal funding from the two partners, has made micro-loans ranging from $7,000 to $10,000 available to local small businesses.
With loan capitalization funding and operational support derived from a grant from the U.S. Department of Housing and Urban Development under the Historically Black Colleges and Universities program, the UAPB Economic Research and Development Center (ERDC) and its Business Support Incubator (BSI) Program packaged all loans and provided technical assistance to the businesses.
Pine Bluff National Bank, through a servicing agreement, administers and services all loans.
“The key to the success of the program has been one-on-one personal contact, follow-up, and technical assistance,” said Henry Golatt, director of ERDC and the UAPB-Business Support Incubator. “Loan fund participants are required to attend specialized training and events such as the UAPB-BSI 3rd Thursday Business Exchange and Networking provided by the incubator.”
After each loan closes, the recipients agree to continue to provide pertinent performance information on their businesses such as sales, jobs created, taxes, etc. to ERDC, Golatt said.
Jeffery Pulliam is a business development specialist with ERDC.
“To date, 16 small businesses have been funded,” Pulliam said. “During the fourth quarter of 2011, three additional businesses received funding from the designated revolving loan fund with a fourth business funded directly by Pine Bluff National Bank.”
Most of the loans have five-year terms.
“The good news is not just that everyone is paying their loans back but that they are building commercial credit that will be useful in growing their businesses, Golatt said.”
The funds loaned to the businesses were leveraged by the participating businesses contributing more than $150,000 of their own funds to their projects. Many of the small businesses are using family and friends as paid and volunteer staff.
With combined 2011 gross sales of more than $490,000, the businesses have paid more than $25,000 in sales taxes back into the local economy. Additionally, these businesses have paid more than $60,000 in payroll and/or contracted services to local employees and contractors, he said.
ERDC has already started working on another project aimed at helping the revolving loan fund recipients and other businesses to grow. ERDC and the UAPB-BSI Incubator are providing organizational support to small businesses operating in the revitalization areas as well as throughout the city to form a cohesive group to address additional needs such as cooperative marketing, advertising, etc. Information is expected to be released soon on that group and will detail the name, mission, and objectives as well as planned events.
Although the press release from the UAPB/City program didn’t list the recipients of the loans, in August 2011, articles in The Commercial reported on several including:
• $9,000 to Angela Tyler for a pizza restaurant
• $9,000 to Tommy York for inventory for a retail uniform store
• $10,000 to Lloyd Cato for working capital for equipment for a transmission shop
• $10,000 to Michael McCray for a minority-owned publishing company
• $10,000 to Jeff Collins for working capital for a computer store.
• $10,000 for Harold Terry of Terry’s Home Cooking Express;
• $9,000 for Theodis Dancy of University Auto Sales;
• $8,500 for Carl Davis of Davis Construction Co.;
• $8,000 for Alex Guynn of the Guynn Law Firm;
• $7,500 for Equador Wiley of University Bait and Tackle LLC;
• $7,000 for Starkiss Enterprises LLC aka Dimeone Fabulous Lifestyles
• $7,000 for Timothy Collins of Classic Cuts Barber and Beauty Shop.
For details on the UAPB-City of Pine Bluff Revolving Loan Program or other ERDC programs, contact Henry Golatt or Jeffery Pulliam with UAPB-ERDC at 575-8030.