May 23, 2017
In a regularly scheduled meeting of the Board of Directors for the Seminole Economic Development Corporation (SEDC) Monday night at City Hall, the Board unanimously approved a package of loan agreements designed to address a variety of small business finance issues. The adoption of the new measures followed a second public hearing that the Board offered. No one from the public addressed the Board.
Among the four new measures that were adopted, the Seminole Expansion and Development Loan Guarantee Incentive Program, according to a summary laid out by SEDC Executive Director Chris Jones, “seeks to provide loan guarantees of up to 50% of a loan amount not to exceed $100,000, providing the applicant has established creditworthiness with a local lending institution. The applicant, at the recommendation of the lending institution, would apply for this guarantee using the established SEDC incentive process.”
Businesses that are eligible for consideration must reside within the 79360 zip code. Those located outside the city limits must establish, in written form, their benefit to the community by way of job creation and/or expansion in property/sales tax collection.
An applicant may be deemed ineligible if he or she has operated a prior business that has caused the government of any local government entity to have incurred a loss related to a prior business debt. “Ownership” includes those holding at least a 20% stake in a business. An applicant with a prior criminal history may also be ruled out.
The business would also be subject to a minimum equity requirement of 15% to 20%. Special considerations may be given to some businesses such as some franchises, certain recreational facilities, or privately owned medical facilities.
Those same requirements apply to the other three other adopted programs, including the Seminole Business Retention Microloan Incentive Program, which “seeks to provide Microloans to established businesses which may experience temporary interruptions in revenue generation which necessitate relief in the form of a short-term loan. These loans are not to exceed $10,000 per business and shall be amortized at a 3% minimum over a period not to exceed three years. Additionally, all applicants must submit an incentive application, which will be approved or denied by the board of directors.”
Microloans can be used for working capital, inventory or supplies, furniture or fixtures, and machinery or equipment. Proceeds from a microloan can be used to pay existing debts only with special approval from the SEDC Board.
The Seminole New Business Interest Loan Rebate Incentive Program is “designed to recruit new businesses by providing a rebate on interest paid for loans related to creation of location of a new business to the City of Seminole. The purpose of this program is to incentivize those businesses which, by securing a loan with a local private lender, have demonstrated a commitment to bringing jobs to Seminole. This is a performance based incentive, requiring the applicant to deliver on their promise of jobs to the community before receiving payment from the SEDC”.
The SEDC Board will evaluate each application based on certain job criteria: number of jobs, wages, number of new jobs for which local residents may apply, and the possible impact of related industry jobs. The length of this rebate shall not exceed two years and $25,000 per year for one applicant. The total earmark within the incentive line item of the SEDC budget is not to exceed $100,000.
The Seminole New Business Low-Interest Loan Incentive Program “provides businesses with financial assistance to support the creation of jobs for the City of Seminole. This program provides long-term, fixed-rate financing at interest rates lower than conventional financing, at a minimum interest rate of 3%. The fund is intended to fill a financing gap beyond the amount of private participation and equity investment that can be raised. Loans can be written from a minimum of $10,000 to a maximum of $250,000, up to 50% of the total project cost.”
Under this program, businesses are required to create one new full-time and permanent job for every $35,000 loaned within three years of loan closing. Businesses must provide a minimum of 10% equity. The business owner must provide a personal guarantee for the loan amount. Terms are for up to seven years on equipment and up to ten years on land and buildings. Loans may not be used to refinance debt, purchase inventory, or pay other non-capital costs or on speculative projects.
Those interested in these loans should contact the SEDC for additional terms and conditions.
Also during Monday’s meeting, Jones led a discussion with the Board concerning the implementation of Multi-view Marketing, according to Jones, a new more measurable way of tracking the effects of online advertising. Using more comprehensive computer analytics, a Multi-vew company team is able to provide information on what companies have visited the SEDC website, for evaluation and possible follow-up.
While no vote was taken on the Multi-view plan, Jones recommended it’s adoption by the Board. Jones told the Board, “this program is aligned with our vision and purpose”.
Jones also unveiled a strategic plan for the city, with a primary focus on four individual areas: Agriculture, Energy, Manufacturing, and Medical. Those will be detailed in the next issue of the Seminole Sentinel.
In his earlier Executive Director’s Report, Jones told the Board that plans for a new Business Park have advanced from the surveying phase into a design phase. He has inquired of engineers as to whether a road to the facility can be built by the end of July. Jones also reported that the SEDC website has been moved to a new address, and efforts are underway to upgrade the site to make it more user-friendly for regular site updates.