Austin’s Family Business Loan was described as a way to encourage small businesses to hire at an Austin Human Resource Management Association meeting.
It’s financed under the U.S. Department of Housing & Urban Development (HUD) Section 108 Loan Program in association with the U.S Small Business Administration, private banks and credit unions. The funds are to benefit businesses and people who fit the profile of “HCU”, hard-core unemployed.
Austin got its $8 million in HUD loan guarantees in May 2012. Kevin Johns, Director of Economic Growth and Redevelopment Services at the City of Austin, manages the loan guarantee program. He’s out there encouraging its use by the business community. This is definitely worth considering if you’re growing your business.
Its Stated Mission
“The Mission of the City of Austin Section 108 Family Business Loan Program is to enable existing family owned small businesses and in the micro loan section of the program to provide existing family owned small businesses or start up businesses to implement business ventures that will create jobs, revitalize communities, increase the tax base of the City, and enhance the overall quality of life for all City of Austin residents. It is designed to leverage 108 funds with SBA 504 funds and funds from a Private Bank and/or Credit Union.”
HCU Gems Walk Among Us
Owners may be reluctant take advantage of these funds because of their concerns about hiring those with a disability, the long term unemployed, homeless, or those just out of prison. But there are overlooked gems out there that are well worth the effort it takes to find and hire them.
NPR’s Morning Edition just reported on one case of overlooked potential. This man was homeless, unkept, had been beaten up and robbed numerous times. A doctor who took care of his injuries also took the time to ask him his story. He learned he was treating and talking to Mike Williams, the inventor of the first intra-oral camera, former millionaire, husband, and father. Dr. Jong Chen thought this was a great waste of great talent and found a way to give Williams another chance. He got him out of the homeless shelter and back on his feet. Since that encounter, they have teamed up to create a business that manufactures a self contained survival pod for the homeless. Other potential uses include emergency housing or a short term rental for those stuck in extended layovers in airports.
Katherine Roberts was another hidden gem. This remarkable Austin woman (by way of Kentucky) was once a horse trainer and a country western singer who opened for Lee Greenwood (“Proud to be an American”). After falling on hard times, she came to get help and stayed to give help to others. In addition to helping people in need get bus passes and groceries, answer phones, and more she was the first to give a big hug, a warm smile, and a funny one-line welcome to everyone she met. Frequently in pain, she never complained. She had only a little money to give but she gave it freely. A diamond in disguise, she was with us for much too short a time.
Neither of these people were found using the HUD Section 108 funds. But, they are examples of what you might be dismissing and why maybe you should consider using this as an incentive to find other gems. They are out there.
Family Business Loan Eligibility
Don’t just blow this off. Really think seriously about it.
Our human treasure has huge returns and the Family Business Loan may be able to get you started. You can use it for working capital, machinery and equipment, or renovation, acquisition of land, new construction — almost anything that leads to job creation.
To be eligible for the loan, the business has to:
- Show it offered 51% of its new jobs to low and moderate income residents in the City of Austin; or that it’s located in a census tract having a poverty rate of 20% or higher (HUD Presumption Rule).
- Have been in the retail, industrial or distribution business for at least two years and been sufficiently profitable.
- Meet the size standards of the U.S. Small Business Administration and be a closely held entity.
- Must be a sole proprietorship (Micro loan applicant only) or any other legally organized private sector business registered with the State of Texas.
Hiring Loan Guarantee Amount
The maximum loan amount for any given project is 40% of the total project cost or up to $1,000,000; whichever is lower. Terms of the loan range from 10 to 20 years.
The applicant must be willing to commit 10% of the total project cost as a minimum and prove that this amount is available.
Reach Out, Don’t Pass By
In my years in business, I’ve hired people who want off welfare or to stay out of it completely. I’ve hired people with disabilities. I’m so glad that I made the effort to find these wonderful people. They gave and continue to give me so much.
Put aside your preconceptions and judgements. Find your own hidden gems. Give them a second chance and you will be rewarded many times over.
Like the Good Samaritan, we can use our resources to help others and not lose out.
What are your experiences with hiring people that others overlooked?