City of Austin Performance Report 2014-15

Number of Jobs Created as a Result of Family Business Loans

Measure Description
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.
Calculation Method
This measure is the total number of jobs committed by FBLP loan agreements. For purposes of this measure the jobs are considered created once the loan documents are executed.
FY 2014-15 Results
In FY 2014-15, 55 jobs were committed by the FBLP, compared to the goal of 125.
Assessment of Results
Family Business Loan Program borrowers commit to create a stated number of jobs as a condition of receiving the loan, and the number of jobs to be created is stated in each loan’s executed closing documents. SBP counts jobs when the loan closing documents are executed. FBLP was just beginning operations when the FY 2012-13 and FY 2013-14 target of 20 was set. The department exceeded the conservative goal in FY 2013‑14 closing five loans that created 52 jobs. The FY 2014-15 goal was increased to 125 jobs, which aligns with the $4.1 million available to loan. Borrowers are required to create at least one full-time job for every $35,000 in loan funds borrowed, and per HUD regulations, 51% of jobs created must be offered to moderate income Austin residents. Three FBLP loans were closed (Airport Commerce LLC., Jose Luis Salon Inc., and Rosa Santis) during FY 2014‑15 that committed 55 new jobs. However, this is below the anticipated level.
Customers lining up outside of Burger Bar on Congress Avenue.
Next Steps
Micro-loan applicants are an underserved population. The entire loan process can take more than six months, and applicants need frequent communication and coaching throughout the process to avoid delays and misunderstandings that can derail the loan and possibly the applicant’s entire project. Several additional loans are anticipated to be approved in FY 2015-16. The original $3.0 million Section 108 allocation from the U.S. Department of Housing and Urban Development (HUD) has been exhausted, and SBP acquired an additional $8.0 million awarded by HUD. The $8.0 million allocation will create a minimum of 229 additional new jobs for low- and moderate-income citizens of Austin.
Contact Information
For more information contact Vicky Valdez, Small Business Program Manager, at (512) 974-7620.