The state of Tennessee and local financial institutions are expected to sign an agreement for a $25 million program designed to give small businesses – with fewer than 100 employees – better access to capital funding to jumpstart their companies.
Dubbed as the “Tennessee Small Business Jobs Opportunity Fund,” the program was specifically designed to encourage small businesses to avail loans from various local banks and expand their operations, which in turn, would generate more jobs.
“Access to capital and other forms of funding remained to be the biggest issue among small businesses in Tennessee,” said Matt Kisber, commissioner of economic and community development in Tennessee.
“But with the implementation of the new program, the General Assembly hopes to influence these firms into expanding their business operations to allow them to increase hiring in the future,” Kisber added.
Based on the implementing guidelines, the General Assembly will provide the first $10 million appropriation to begin the program, which will be followed by an additional $15 million from the bank consortium.
Meanwhile, Pathway Lending, a non-profit organization handling similar small-business loan programs – public and private funding – will administer the program.
Pathway President Clint Gwin said that they have been discussing the new scheme with other local banks, adding that they will be able to come up with the bank’s portion by next year.
But unlike similar Pathway programs, which are only available in businesses operating in rural areas in the state, the new scheme is also designed to make loans available to small businesses in other parts of the world – about 95 countries.
“Interest charges on loans will be at current market rates,” Gwin said, adding that a minimum of $35,000 will be given to each borrower.
However, other small businesses – restaurants, retail clothing stores, liquor and cigarette outlets, trucking companies, sex-oriented businesses, payday lenders, and gambling operators – are not eligible for the loan program.