A partnership between the City of Oklahoma City and i2E Inc. has expanded the financing options by $2 million for Oklahoma City-based small businesses seeking capital to grow their ventures and create new jobs.
The city, i2E and the Oklahoma City Economic Development Trust created the $2 million GrowOKC Fund through a Memorandum of Understanding, which was unanimously approved by the City Council on Aug. 13.
i2E committed $1 million to the new fund from its GrowOK Fund, which is part of the federal State Small Business Credit Initiative (SSBCI) funds it manages on behalf of the U.S. Department of Treasury and the Oklahoma Department of Commerce.
Oklahoma City and the Economic Development Trust committed $1 million to the fund from its Strategic Investment Program (SIP) low-interest loan program.
“We believe this partnership will help Oklahoma City-based small businesses close a critical capital gap they need to finance expansion projects and create new jobs,” said Scott Meacham, i2E President and CEO. “GrowOKC won't compete with local banks, but leverage bank financing to ultimately help create jobs and wealth that benefits all of Oklahoma.”
The GrowOKC Fund will support existing Oklahoma City small businesses with growth capital financing of $100,000 to $250,000 per investment through low-interest loans, and equity and convertible debt investments. It will require a dollar-for-dollar co-investment from the small businesses which can be in the form of cash, borrowed funds or new equity invested by the participating companies.
In many cases, the fund will supplement bank financing to achieve specific levels of investment capital.
Funds will be available only for companies retaining or creating primary jobs in areas such as manufacturing, distribution, and warehousing and business services. Retail businesses will not qualify for funding under applicable guidelines.
“Let's say an Oklahoma City-based manufacturer is developing a quality strategy to expand its business and new production equipment is required to accomplish this strategy,” Meacham said. “That means they have to make a pretty heavy capital investment. The GrowOKC Fund provides an excellent avenue to obtain the funding needed to make the investment.”
GrowOKC is a partnership designed to deploy federal and state funds to help small businesses in the Oklahoma City area.
“We've been looking for ways to help small businesses, and this partnership has created an exciting program for that purpose,” said Cathy O'Connor, President of the Alliance for Economic Development of Oklahoma City. “We expect this new source of capital will fill a need and help spur more small business expansion and job growth throughout the city.”
Qualified companies must be generating revenue from sales of products or services and have positive cash flow.
“The new GrowOKC Fund adds another source of funding for Oklahoma City small businesses that complements bank loans or equity investments,” said Brent Bryant, Economic Development Program manager for the City of Oklahoma City.
i2E will manage the initial due diligence and underwriting, and will provide quarterly reports on investment activities.
The GrowOKC Fund partners will track jobs created or retained by funded companies and private investment leverage over the life of the partnership.
Image Courtesy of David Castillo Dominici / FreeDigitalPhotos.net
