Revolving Loan Fund for Small Business
The City should use Public Private Partnership
allocations to immediately increase capital available to established alternative loan funds for
lending to businesses located in southern Dallas or for expenses associated with moving a business to
southern Dallas. The Plan Fund is capable of making loans as low as $500 while SDDC makes loans
up to $300,000. SDDC makes loans primarily from the highly restrictive Community Development
Block (CDBG) Program. Accion Texas makes loans between $5,000 and $100,000. The Southern Dallas
market has demonstrated a need for a Micro Loan product which is typically less than $35,000. A
March 31, 2009 edition of the Wall Street Journal reported that “With many banks continuing to put a
hold on lending, more small-business owners and would-be entrepreneurs are turning to micro lenders”.
In its deliberations the Small Business Team reviewed revolving loan fund programs in Portland Oregon,
St. Louis Missouri, and Pittsburg Pennsylvania. The working capital and equipment loans provided by
the Portland Development Commission have interest rates, interest only payment periods, and amortization
terms superior to those provided by SDDC. An infusion of capital would enable SDDC to improve
its terms, increase its business lending volume and improve its overall economic development impact.
The Small Business Team recommends that $1 million of the funds now allocated to public/private real
estate projects should be re-directed to micro loans for start up businesses and working capital/
equipment loans to be provided by SDDC to newly established businesses with growth potential.
Status - Completed
On May 12, 2010, the Dallas City Council approved $1 million from the Office of Economic Development's Public-Private Partnership Fund for the creation of a small business loan program for Southern Dallas. The program will be administered through the Southern Dallas Development Corporation.
Read more about the Small Business Team's proposed project in the Interim Team Report. |
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