Certain small businesses soon will again have access to a fund that provides small loans for working capital.
City Council’s Finance Committee approved an ordinance Wednesday to appropriate $932,000 to revive the Office of Economic Development Access to Capital Program.
Unsecured loans will be available to participants in the Jacksonville Small and Emerging Business program that have contracts to perform work for the city.
The full council will vote on the ordinance at its meeting Tuesday.
To qualify as a JSEB, the majority owner must have an established headquarters in Jacksonville for at least three years and must have been a resident of Duval, Baker, Clay, Nassau or St. Johns counties for at least one year.
The owner must have a personal net worth of $605,000 or less, excluding their primary residence, and the business must be for-profit with a gross annual income of $6 million or below.
The loan program was established in 2005 with funds from JEA, the Jacksonville Port Authority and the Jacksonville Transportation Authority.
It has been suspended for a few years because the municipal code requires the loan program to be privately managed and when the agreement with the previous manager expired, the city didn’t secure a replacement, said Kirk Wendland, executive director of the economic development office.
About a year ago, the city issued a request for proposals for a program manager and Accion East was the sole respondent, he said.
According to a summary filed with the ordinance (2016-486), Accion is the leading micro lender to small businesses in Florida and works closely with the U.S. Small Business Administration.
The company serves more than 60 small businesses in Duval County with capital and financial education. It wrote loans to 11 local small businesses in 2015 for a total of $80,000, according to the summary.
Wendland said Accion will underwrite and service loans between $5,000 and $100,000 with terms of 24 to 60 months at an interest rate of 8.99 percent. He said they’re loans to get small businesses up and running.
“That will keep JSEB owners from borrowing from family or friends or financing with their credit cards at about 16 percent,” he said.
The city will pay the company a $2,500 monthly management fee and Accion will keep the interest on the loans, with the principal returning to the fund.
Wendland said in the eight years the program was active, 71 loans were written and only three lenders defaulted, for a loss of about $138,000.
When the fund returns to operation, about $829,000 will be available to lend, he added.
Accion will be required to negotiate loan and management policies with the city and will submit monthly reports.
“It will be very transparent as to what activity is going on,” said Wendland.
Also on the way to council on Tuesday:
• An ordinance to clarify procurement regulations concerning responsibilities of companies with city contracts to hire ex-offenders who are in re-entry programs when qualified workers are available in the programs.
• An appropriation of $190,000 — reduced from a request of $377,000 from the Downtown Investment Authority — to improve a parking lot near the Sports Complex, renovate an adjacent dock for use by St. Johns River Taxi and private boaters, and construct a lit and landscaped sidewalk between the river and the parking lot.
• An emergency $250,000 appropriation requested by Mayor Lenny Curry to provide the federal Integrated Shell Casing Identification System to the Jacksonville Sheriff’s Office.
(904) 356-2466