Percentage of the Family Business Loan Program Funds Used to Assist Small Business Owners in Expanding Their Businesses
The Small Business Program’s (SBP) Family Business Loan Program (FBLP) makes low-interest fixed asset and working capital loans to qualified Austin small business owners who are ready to expand their business and create jobs. These loans commit the borrowers to create one new job for low- to moderate-income persons for every $35,000 borrowed. This measure is the percentage of the Family Business Loan Program funds loaned that are used to assist small business owners in expanding their businesses.
This measure is calculated by dividing the total amount of funds used for family business loans by the total amount of funds available.
FY 2015-16 Results
In FY 2015-16, 8% of the Family Business Loan Program funds were used to assist small business owners in expanding their businesses. The goal was 20%.
Assessment of Results
The Family Business Loan Program was approved by Council in 2012 and funded by a $3.0 million allocation of U.S. Department of Housing and Urban Development (HUD) Section 108 funding. The original $3.0 million Section 108 allocation was exhausted in FY 2014-15, but an additional $8.0 million allocation was obtained from HUD in mid-FY 2015-16. The FY 2015-16 target of lending 20% of the $8.0 million allocation assumed that the allocation would be available at the beginning of the fiscal year; however, the allocation process was not completed until mid-FY 2015-16. A typical FBLP loan takes about 6 month to complete, so insufficient time remained to reach the 20% target. In FY 2015-16, FBLP made 6 loans totaling $618,250, which created 31 jobs. This amounts to 8% of the $8.0 million allocation.
FBLP will have Section 108 funds available for the entire FY 2016-17 fiscal year, so a sufficient volume of loans should be made to reach the 20% target.
For more information contact Vicky Valdez, Small Business Program Manager, at (512) 974-7620.