Ohio entrepreneurs are offered a credit lifeline
He told me that his company's credit line hadn't been renewed. "Talk about putting a business into a tailspin," he grumbled. "The worst part was... I didn't see it coming. Our credit was good. We always paid our bills on time. And then, two weeks before the maturity date, my banker calls to tell me it's not being renewed. And the money I owed on the line, about $80,000, had to be paid off."
I'm thinking about this guy because if his business were based in Ohio, I'd be e-mailing him about a new program that just launched last week, designed to help small and medium-sized businesses get funding. As in loans. As in much-needed moolah. Unfortunately for him and entrepreneurs in the other 49 states, it's only being offered in Ohio, but the Ohio government officials working behind the scenes believe that their model could be adopted by other states.
For the Ohio entrepreneurs reading this, you should probably start looking into applying to get credit from the Ohio and Huntington Job Growth Partnership, which is the name of this $1 billion lending program aimed at small and medium-sized businesses.
Amazingly, there is no Web site yet for interested applicants, but I get the feeling that's because this program came about pretty quickly. If you're an entrepreneur and want to look into this, however, you can call the toll-free number, 1-866-644-9786, for more information.
Mark Barbash, the director of the Ohio Department of Development, told me that a Web site is coming soon, but that they want to make sure that they have everything else with the program nailed down first, "so that we don't let get folks caught up in bureaucracy."
In any case, I spoke to Barbash about the program, to get a better idea of who should be applying for the Ohio and Huntington Job Growth Partnership, and here's the gist of our conversation:
A billion dollars is a lot of money. How many businesses will be helped? This is a program that will disperse funds over the next three years, and Barbash says that they haven't made any guesses of how many companies may benefit. "You can't even make the assumption on how many businesses we may have go through the program," says Barbash. That's due to the math. As he explains: "One company may need $30,000, and you could have another that needs $10 million."
Defining small and medium sized businesses: Barbarsh said that if you're a company with 10 to 100 employees, that's probably what they're looking for, but he also stressed -- several times -- that there are "no automatic limitations." I got the sense that if you're a tiny business with maybe one employee, or just yourself, if you can prove that you'll be using the money to hire people, it's still worth looking into, and likewise if you're a giant corporation.
Barbash himself said, "If someone has 600 employees and is looking to make an investment in the state or wants to retain jobs, we'd like to hear from them."
Do you have to be a customer at Huntington Bank, the other giant vessel in this partnership, to get a loan through the program? No.
Before calling the hotline, is there any information you should have at your fingertips? Barbash says that "the most important thing is a clear description of what your needs are. If you need working capital, money to pay the bills and to pay for receivables and payables and things like that, that requires one kind of financing, whereas looking to buy equipment and renovating the building requires another. You just have to have a good handle on what your business is."
I'm guessing anything else you may need -- like your company's Web site, the address, your EIN (corporate social security number) -- you'll have memorized. But the message is clear. Don't call if you have no real vision of what you want this money for.
On that note... It's probably worth noting that the publisher I mentioned paid me back about a week after sending me that e-mail. As he ended his e-mail, he said, "But my business has survived, and we continue to modify our plan and move forward."
It's that type of entrepreneur -- the kind who pays off his bills even when being hamstrung by banks tightening credit -- that Barbash says that their $1 billion credit lending partnership hopes to reach.
"A lot of businesspeople are feeling discouraged about finding financing right now, so we're trying to help overcome some of the pessimissm out there," says Barbash, "and to let people see that there are opportunities out there. If a business has had credit crunch problems as a result of the banks' problems, we can't guarantee they'll find help here, but this gives them someplace new to go to. But if they've had credit problems over the last couple years and are thinking that this could be their last resort, this is not the place to go. The isn't bailout financing."
Geoff Williams is a frequent contributor to WalletPop.com and has written about entrepreneurship for over a decade for Entrepreneur Magazine. His last story for Entrepreneur was in the April issue, about utilizing humor in marketing.