Area small businesses will soon have the opportunity to access more than $2 million in new civic supports.
What happened
a collection of Austin Economic Development On September 24, the City Council advanced financing and entrepreneurship programs totaling $2.18 million. They included:
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Up to $1.5 million for small business interest-bearing loan purchase pilot program contract with Austin-based nonprofit people background
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A $432,000 contract with a San Francisco-based nonprofit kiva to manage revolving matching funds for crowdfunded small business loans
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A $250,000 contract with the University of Texas at Austin McCombs School of Business for a small business pitch competition
“Access to capital remains one of the most significant challenges facing small businesses, and these programs give Austin entrepreneurs more options to secure the resources they need to succeed,” Austin Economic Development Director Mac Cummins said in a statement. “These innovative programs will help reduce borrowing costs, leverage community investment and create new opportunities for local entrepreneurs to start, stay and grow in Austin.”
A closer look
PeopleFund’s purchasing pilot is intended reduce interest rates on loans granted to eligible businesses, bringing them closer to competitive market rates. The half-million-dollar city grants are expected to leverage between $3 and $4 million in loans and help 75 to 100 businesses during the first year of the pilot, allowing them to invest savings in their operations, local employees and growth plans.
PeopleFund was the top scorer in public solicitation for the management of the program, for which three candidates were presented.
The Kiva initiative will be added to the existing one Austin Kiva Center microcredit program, which launched in March and now offers limited financing to businesses with no interest and no fees under a peer-to-peer lending model.
Dollars approved this fall will be applied to a Child Care Business Fund, a Business Interruption Fund, and a Small Business Skills Graduate Fund, and businesses that fit into those groups will be eligible for 2:1 matches.
“Matching funds will result in the ability to fund loans at a faster rate and achieve a higher rate of fully funded loans. Matching funds are revolving, as borrowers repay, funds are lent to new borrowers, magnifying the impact of the initial investment,” the city’s agenda document says. fixed.
The more than $430,000 upgrade is expected to fund and match 200 microloans and generate a total economic impact of $1.4 million over several years.
Finally, the university partnership will help develop the new small business pitch contest facilitated by the city and UT. Entrepreneurship in Texas. The program will allow small businesses that are in the planning or start-up phases to present their concepts and compete for various awards before a panel of judges. More information about the program is expected next year.