Opinion: Funding need not be barrier to business

In my nine years with Springfield Business Journal, I’ve had several opportunities to serve on community boards. Though, it has always been with the caveat I’m not participating as a member of the press.

I completely get that and have never been at odds with wearing two hats. I’ve just appreciated having the opportunity to contribute in a meaningful way. Of course, the fact SBJ employs professional journalists who don’t particularly need my assistance to know what is going on in town also contributes significantly to my peace of mind.

That aside, I’ve participated on the Springfield Finance and Development Corp. board for the last few years as a community representative. Though sworn to secrecy on most items that come before the board made up almost entirely by bankers, there’s finally something I’ve been given permission to leak to the press: We’ve got a sum of money to loan to small businesses located in central Springfield. The area outlined is from Kearney to Grand streets and Glenstone Avenue to West Bypass.

SFDC, established in 1997 to assist in revitalizing center city through creative financing, is now funded through the investments of 13 banks, or shareholders. The banks on board are BancorpSouth, Bank of America, Bank of Missouri, Commerce, Central Bank, Guaranty, First National Bank, Great Southern, Regions, Bear State, Simmons, UMB and U.S. Bank. To date, it’s issued 40 loans totaling $2 million.

At first, I was a little intimidated sitting in the room with a bunch of bankers as they dissected project proposals and poured over the financials of small businesses not that different from the one my mother and I own. As small-business operators, these are the very conversations we’ve sometimes come to dread. You know, the kind where you have a great idea, but you have to ask for money and you may not currently meet all the mandated conditions for borrowing.

My mindset shifted fairly quickly as I watched traditional bankers advocate for some pretty nontraditional loans. You see, many of the requests that come through SFDC originate with a local bank. The designated bank is often able to extend a business loan, but it’s still looking to the borrower to provide required collateral or a down payment. The goal of SFDC is often to work in tandem with the bank to fill a gap or find a solution that strengthens the position of the borrower while also meeting the needs of the bank.

SFDC loans are not limited to gap financing. Loans, which on average are $75,000-$125,000, have been made for the purchase of real estate, construction, equipment needs, leasehold improvements, working capital, labor and materials, even business acquisitions. Eligible borrowers may be existing small businesses or startups.

Perhaps the best news yet is that opportunities exist on both sides of the banker’s desk. SFDC is currently on the lookout for additional investors. Lending institutions not yet participating have an opportunity to invest in job creation and the growth and vitality of center city in exchange for tax credits and a seat at the table. Business owners have an avenue to a far less intimidating funding ask.

The process very simply begins with a need or idea. From there, I’d recommend a conversation with your banker. Be sure to ask if your bank is an SFDC investor. Another point of entry is the city’s Department of Planning and Development and Community Development Loan Officer Melissa Barton.

Either way, funding need not be the barrier to starting or growing a small business in center city.

Springfield Business Journal Publisher Jennifer Jackson can be reached at jjackson@sbj.net.