HomeMy WebLinkAboutResolutions - 2016.05.05 - 22343MISCELLANEOUS RESOLUTION #16097
BY: Planning and Building Committee, Commissioner Philip Weipert, Chairperson
IN RE: ECONOMIC DEVELOPMENT AND COMMUNITY AFFAIRS - RENEWAL OF OAKLAND
COUNTY MICROLOAN PROGRAM
To the Oakland County Board of Commissioners
Chairperson, Ladies and Gentlemen:
WHEREAS Start-up small businesses continue to have great difficulty in accessing capital, as do existing
small businesses in acquiring loans to grow their businesses; and
WHEREAS Center for Empowerment and Economic Development (CEED) Lending has managed
Oakland County's Microloan program since 2010 in partnership with the Small Business Administration
(SBA) that offers a number of other programs and services for small businesses; and
WHEREAS the SBA has matched Oakland County's initial investment into the GEED Microloan program
to leverage that $200,000 through the Economic Development Corporation Special Revenue Fund
(#21180) into close to a $1 million available for Oakland County businesses; and
WHEREAS Oakland County's CEED Microloan program makes very small loans to start-up, newly
established, or growing small businesses; and
WHEREAS This Microloan program makes loans available to eligible borrowers in amounts up to a
maximum of $50,000, with loan repayment periods of up to five (5) years; and
WHEREAS Oakland County's Microloan program has leveraged the initial $200,000 investment from the
County to grant 41 loans to Oakland County small businesses totaling $923,300 and creating 115 new
jobs and retaining another 126 jobs; and
WHEREAS Oakland County Government recognizes the importance of small business success as vital to
our growing economy and the important role that the Microloan program has made to the economic
development success of the county.
NOW THEREFORE BE IT RESOLVED that the Oakland County Board of Commissioners renews the
Oakland County Microloan Program for FY 2016 and invests an additional $200,000 in to the Economic
Development Corporation Special Revenue Fund (#21180) that will be leveraged by the SBA through
CEED to make available $600,000 in new available loans to eligible Oakland County small businesses.
BE IT FURTHER RESOLVED that the Oakland County Microloan Program will continue to reside in the
Department of Economic Development and Community Affairs and monitored through the Economic
Development Corporation, where these small businesses can also gain seamless access to our One Stop
Shop Business Center resources and services.
Chairperson, on behalf of the Planning and Building Committee, I move adoption of the foregoing
resolution.
ING AND BUILDING COMMITTEE
Copy of CEED Lending Oakland County Request a vir-.N )-1-;EED Lending Oakland County 2010 — 2015
Progress Report on file in County Clerk's office.
ENDIN
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CEED Lending Oakland County
Request: $ 200,000 request for CEED Lending Oakland County
Current Situation: CEED Lending Oakland County has completed the first round of loans utilizing
$ 200,000 received from Oakland County. A total of 41 loans were made totaling $ 923,300. These
loans created 115 jobs and retained another 126. There were $ 23,847 in loan charge-offs. There is
currently a balance of $ 111,153 in loan loss reserves which is securing the remaining outstanding loans
in the portfolio. These funds will be available in approximately 24 months.
Oakland County EDC provided the original funding in the following manner. In 2010, $ 100,000 was
provided to CEED Lending Oakland County and then a second installment of $ 100,000 was provided in
2011. We are requesting that the additional funding be provided in the same manner. CEED Lending
Oakland County is requesting $ 100,000 for 2016 and $ 100,000 for 2017.
2016-2018 Goal for Oakland County: provide $ 600,000 in small business microloans
• Create/retain 200+ jobs in Oakland County
• Extend the availability of credit to those who cannot obtain conventional financing
• Graduate borrowers from microloan fund to conventional financing
Work plan:
Belinda Turner-DuBois will continue to work from the One Stop Shop in Waterford 2 —3 days a week.
She will attend their weekly staff meetings and go on site visits with staff. Outreach to all county
commissioners, bankers and business associations will continue. A Loan Ambassador breakfast for CEED
Lending will be held on March 22 at the Auburn Hills Marriott Pontiac at Centerpoint and stakeholders
will be invited.
Monthly loan orientations will be held at the One Stop Shop as well as local chambers of commerce
from time to time. CEED Lending Oakland County will also become involved in the partnership between
Oakland County and Oakland University with a strategic focus on business start-ups supported by
Oakland University School of Business.
Involvement in the City of Pontiac's annual Small Business Conference will continue as well as continued
support of the annual Oakland County CRA Breakfast for small businesses interested in financing.
Belinda Turner-DuBois provides business counseling and referrals to existing loan clients as well as
support to potential borrowers.
Funding Strategy:
Operations - Oakland County EDC $ 100,000
U.S. Small Business Administration $ 100,000
Loan Loss Reserve - Oakland County EDC - $ 100,000
Loan Capital - U.S. Small Business Administration $ 600,000
Borrowed by CEED Lending — 10 yr. note
Total
$ 200,000
$ 100,000
$ 600,000
$ 900,000
CEED Lending Oakland County is an initiative of the Great Lakes Women's Business Council, formerly
known as the Center for Empowerment & Economic Development (CEED).
CEED Lending Oakland County
2010 - 2015 Progress Report
'EF
Executive Summary
A partnership was created between Oakland County Economic Development Corporation, CEED and
the U.S. Small Business Administration to create a microloan program specifically for Oakland
County businesses. The Oakland County Economic Development Corporation invested $200,000 in
the microloan program with $135,000 being used for the required loan loss reserve and $65,000
being used for program operations. CEED borrowed $900,000 from the U.S. Small Business Admin-
istration for the CEED Lending Oakland County fund. For every $15,000 in loan loss funds, CEED is
able to borrow $100,000 in loan funds from the U. S. SBA.
The program has met its goal by lending out all of the funds to Oakland County businesses. A total
of 41 loans were made, generating the creation of 115 jobs and retaining another 126.
Results
Number of Loans Made
Existing Businesses
Start-Ups
Loans Value
Economic Impact
Jobs Created 115
Jobs Retained 126
41
24
17
$923,300
Current Loan Portfolio Status
Loans in Portfolio - $ 220,139 (23.8% of loans made)
Loans in Repaid - $ 679,314 (73.6% of loans made)
Charged Off Loans- $ 23,847 (2.6% of loans made)
Loan Demographics
Auburn Hills 1
Bloomfield Hills 3
Clarkston 4
Clawson 2
Farmington 5
Highland 1
Novi 2
Oxford 2
Pontiac 1
Southfield 10
Troy 4
Walled Lake 1
Waterford 3
West Bloomfield 1
Wixom 1
Total 41
Outreach Activities
• A one-minute professionally produced television commercial was created for the CEED Lending
Oakland County fund. Comcast provided airing sponsorship, along with the purchase of specif-
ic airing times and channels to market the program.
• Belinda Turner-DuBois Oakland County and City of Detroit Loan Officer appeared on local
news and cable shows including WDIV Channel 4, Farmington and Farmington Hills local cable
shows, and Andy Meisner's Oakland Connection.
• Monthly loan orientations are held at the Oakland County One Stop Shop as well as some of
the local Chambers of Commerce.
• Other outreach efforts include hosting the annual Oakland County CRA Association breakfast.
For the past three years CEED Lending has brought together small business owners and finan-
cial resources in this non-threatening teaching environment financial educational environment.
• CEED Lending participates in the small business summits. For example, we participate in the
City of Pontiac's annual Small Business Conferences by serving as a presenter and having a
resource a table.
• Belinda Turner-DuBois frequently presents to local Economic Development Corporations and
Downtown Development Authorities in Oakland County.
• She also participates in weekly staff meetings with One Stop staff to share and stay abreast of
any activities that are related to small business owners.
Lessons Learned
Working closely with Oakland County economic and business development programs and their
partners has been critical to the success of CEED Lending Oakland County. This has been a source
of solid client referrals, coordinated services, and active involvement of all available resources. Joint
outreach efforts and knocking on the doors of businesses has benefited several programs. Belinda
Turner-DuBois maintains an office presence two days a week at the Oakland County Business Center.
While we have achieved the results that we set as our goals, we could have accomplished them
much faster if we had the resources to more fully staff and market the program.
Success Stories:
While many of our borrowers have created successful businesses, we have selected 5 stories to share
with you that represent th range of businesses and types of assistance provided to the borrowers.
Vasillios Papadopolous
Kevin Maguire
Karen Gara
Lynn Drake
Christine Ellis
Power Wheels Pro
Maverick Building Systems
Robin's Song, dba Rebecca's Wigs
Compass Commercial
Facet Business Communications
PowerWheels Pro LLC was started by Vassilios Papadopoulos in 2008. Power Wheels began
importing and selling wheels for premium German and British cars and SUV's in their Wa-
terford location. The automotive aftermarket accessory market was healthy, with purchasers
looking to personalize their vehicles by upgrading wheels. Starting with one container of
wheels which sold in 2 months to customers via EBay, the company bought more containers
and began marketing to wholesale customers such as new and used car dealerships as well as
auto repair facilities. Vassilios approached several banks with his business plan and request
for funding and was promptly denied. He still proceeded with his own "bootstrapping" and
eventually the hard work paid off.
In 2011 CEED Lending was able to assist with a loan to purchase much needed inventory.
Soon his products were recognized by Belle Tire. Due to the new relationship with Belle Tire
and a growing consumer market, PowerWheels experienced an overwhelming product de-
mand and was having to turn away customers due to lack of inventory. The business contin-
ued to grow, expanding into the domestic car market including muscle cars such as Mustangs
and Camaros. CEED Lending was able to help with yet another loan to satisfy the need for
additional inventory.
An engineer by trade, but also having a good understanding of his financials, Vassilios was
able to strategically implement growth strategies that soon took the business to financial
needs beyond CEED Lending. Due to the business growth and financial track record, Vassi li-
os was able to secure a credit line from a traditional lender which enabled him to pay off his
CEED Lending loan (early) and continue managing his growth.
In 2009, Kevin Maguire's bank called his commercial loan for Maverick Building Systems due. The
economic downturn had started and even though he had been a good solid bank customer, his
on time pay history nor relationship didn't stop the bank from freezing and eventually closing
his credit line. He needed help to keep his construction supply company; located in Commerce
Township open, but didn't know where to turn. Kevin sold the building that housed his busi-
ness and leased it back from the new owner. He also had to lay off several employees and
exhaust all of his personal resources to try to stay afloat.
Maverick sells lumber to builders and while half of the competition didn't survive the reces-
sion with the help of CEED Lending Kevin was able to purchase enough inventory to keep the
business in business.
He happened to see a notice in a local paper regarding the CEED Lending Oakland County
and according to Kevin "CEED Lending was the only game in town willing to lend money to a
small business." Maverick has since been able to upgrade equipment and bring laid-off em-
ployees back to work.
Karen Gara
Robin's Song, dba
Rebecca's Wigs
The Farmington studio has been a main stay in downtown for over 40 years. Karen Gara was an
employee before purchasing the business when the previous owner retired. Karen wanted to
expand the studio adding more wigs and creating a "spa like" atmosphere for her clients. While
looking for funding avenues she came across information about CEED Lending. We were able to
assist with a loan for working capital and wig inventory allowing Karen to expand into an adjoin-
ing suite on Farmington Rd.
The wig inventory provided Karen with the opportunity to work with a growing number of
women experiencing hair loss due to radiation, chemo treatments or other illness.
She worked wonders with ladies suffering not only from the various diseases but a loss of
self-confidence due to an unwelcome change in physical appearance. Karen approached several
of the oncology nurses and doctors at Botsford Hospital with an idea to open a small wig salon
there in the hospital. Her proposal was well received because she had helped a number of their
patients and the mental improvement was quite visible.
Again, needing money for more expansion, Karen came back to CEED Lending for help. The
second loan enabled Karen to open Rebecca's Wigs in another adjoining suite, providing a more
extensive line of wigs and private fitting rooms for those needing more personal attention.
Karen Gara was honored as the SEED Microloan Outstanding Achiever for her business manage-
ment skills and the support and mentoring that she provides to other business owners. As a result
of Karen's growth she has needed to hire eight new employees for a total of 10.
Lynn Drake worked for 15 years in corporate real estate before becoming a commercial realtor
in 2001. After years of working for someone else she decided to start her own firm. In 2010,
using her savings and borrowed funds from family; she opened Compass Commercial. As her
funds began to diminish, Lynn approached several banks for a business loan and received no
help. Her business was not only a start-up (ignoring her years of experience in the field) but it
was also affiliated with the real estate industry. Banks could not see her potential.
CEED Lending helped with a loan for working capital and computers. Not long after that Compass
Commercial grew from a home based business to needing more room. She opened an office in
Troy and was able to add to her staff.
Working diligently and strategically, Compass Commercial continued to grow and needed yet
a larger space. Lynn came back to CEED Lending to help with working capital and office fur-
nishings. In 2013 Compass Commercial applied to the State of Michigan and won the right to
represent the state in real estate needs. This was a huge success, beating out the "who's who" in
real estate.
Thus far in her career, Lynn Drake has successfully completed more than 2,500 real estate
transactions ranging from small business tenant office leases to the sale and purchase of indus-
trial complexes. Lynn Drake received the CEED Microloan Outstanding Achiever award in
2014 for her business success and professionalism. She also served as a City of Troy Planning
Commissioner.
is me Ellis
President
acet Business Communications
Facet Business Communications started in 1988 and has a global base with 60% of its
business directed towards the export of its marketing and trade show services. Company
founder, Christine Ellis has received numerous awards from overseas governments for
supporting large groups of international exhibitors attending major trade events.
When Facet needed money for growth, traditional bank financing was not available.
Christine used her funds to purchase a building for her business in Novi and CEED
Lending was able to provide working capital to hire new employees and cover moving
expenses.
Over the last five years Facet has received several loans from CEED Lending as the
company continues to expand.
Resolution #16097 April 21, 2016
The Chairperson referred the resolution to the Finance committee. There were no Objections.
FISCAL NOTE (MISC. #16097) May 5, 2016
BY: Finance Committee, Tom Middleton, Chairperson
IN RE: ECONOMIC DEVELOPMENT AND COMMUNITY AFFAIRS - RENEWAL OF OAKLAND
COUNTY MICROLOAN PROGRAM
To The Oakland and County Board of Commissioners
Chairperson, Ladies and Gentlemen:
Pursuant to Rule XII-C of this Board, the Finance Committee has reviewed the above referenced
resolution and finds:
1. The resolution renews the Oakland County Microloan Program for FY 2016 and invests an
additional $200,000 into the Economic Development Corporation Special Revenue Fund
(#21180) that will be leveraged by the Small Business Administration (SBA) through Center for
Empowerment and Economic Development (GEED) to make available $600,000 in new loans to
eligible Oakland County small businesses.
2. Oakland County's Microloan program has leveraged the initial $200,000 investment from the
County to grant 41 loans to Oakland County small businesses totaling $923,300 and creating 115
new jobs and retaining another 126 jobs.
3. The Microloan program makes loans available to eligible borrowers in amounts up to a maximum
of $50,000, with loan repayment periods of up to five (5) years.
4. Funding from the General Fund Assigned Fund Balance for Microloan (GL Account #383468) is
available to transfer to the Economic Development Corporation Special Revenue Fund (#21180).
5. A budget amendment is recommended as follows:
GENERAL FUND (#10100)
Revenue
9010101 -1 96030-665882
FY 2016
Planned Use of Balance
Total Revenues
$200,000
$200,000
Expenditures
9010101-196030-788001-21180 Transfer out EDC Fund
Total Expenditures
ECONOMIC DEVELOPMENT CORP FUND (#21180)
Revenue
1090202-171110-695500-10100 Transfer In-General Fund
Total Revenues
$200,000
$200,000
$200,000
$200,000
Expenditures
1090202-171110-731458 Professional Services
Total Expenditures
$200,000
$2.Q0. 000
FINANCE COMMITTEE VOTE:
Motion carried unanimously on a roll call vote with Woodward absent.
Resolution #16097 May 5, 2016
Moved by Fleming supported by Quarles the resolutions (with fiscal notes attached) on the Consent
Agenda be adopted (with accompanying reports being accepted).
AYES: Dwyer, Fleming, Gershenson, Gingell, Gosselin, Hoffman, Jackson, KowaII, Long,
McGillivray, Middleton, Quarles, Scott, Spisz, Taub, Weipert, Woodward, Zack, Crawford. (19)
NAYS: None. (0)
A sufficient majority having voted in favor, the resolutions (with fiscal notes attached) on the Consent
Agenda were adopted (with accompanying reports being accepted).
HEREBY APPROVE THIS RESOLUTION
CHIEF DEPUTY COUNTY EXECUTIVE
ACTING PURSUANT TO MCL 45.559A (7)
STATE OF MICHIGAN)
COUNTY OF OAKLAND)
I, Lisa Brown, Clerk of the County of Oakland, do hereby certify that the foregoing resolution is a true and
accurate copy of a resolution adopted by the Oakland County Board of Commissioners on May 5, 2016,
with the original record thereof now remaining in my office.
In Testimony Whereof, I have hereunto set my hand and affixed the seal of the County of Oakland at
Pontiac, Michigan this 5th day of May, 2016.
Lisa Brown, Oakland County