YOUNGSTOWN — A business development and job creation organization has been awarded $1.6 million to support small businesses and entrepreneurs in Trumbull and Mahoning counties.
The funding from the U.S. Economic Development Administration will be used by MVEDC (Mahoning Valley Economic Development Corporation) to establish a new revolving loan fund.
“We just found out hours before everyone else,” said Teresa Miller, MVEDC assistant executive director. “We received the same press release and are excited and shocked.”
MVEDC, local financial institutions and the nonprofit Common Wealth Inc. in Youngstown pooled $400,000 in matching dollars to secure the 80 percent / 20 percent federal grant, giving them $2 million in the fund.
The money, which Miller said should be available in the first quarter of 2020, will be loaned to businesses unable to get traditional financing due to low credit scores or lack of cash equity. Up to $150,000 is available per application.
Part of the interest on the loans will be used to sustain and grow the fund. A similar grant to MVEDC has been in circulation since 1978.
The money is expected to help create 200 jobs, retain 55 jobs and generate $9 million in private investment.
U.S. Rep. Tim Ryan said the funding comes at a critical time in the region, which has suffered recently from the closure of the General Motors assembly plant in Lordstown and subsequent loss of 1,500 or so jobs directly related to it. Other indirect job loss at suppliers provides greater impact.
“Revolving loan programs are primarily used for the development and expansion of small businesses in their regions,” Ryan, D-Howland, said in a news release. “There are roughly 30.2 million small businesses in this country, which accounts for 99.9 percent of all United States business. By focusing our attention to help small business grow, we can foster our local economies ,keeping money close to home, and support our neighborhoods and communities.”
U.S. Sen. Rob Portman, a Republican from Cincinnati, wrote in a letter in April to U.S. EDA Director Jeannette P. Tomayo the GM closure significantly impacted the local economy and establishing the fund would “bring an opportunity to northeast Ohio for economic diversification” by helping businesses having difficulty securing traditional bank loans.