Small Business Program Review Erik Hansen, Director of Economic - - PowerPoint PPT Presentation

Small Business Program Review

Erik Hansen, Director of Economic Policy & Development

January 7, 2020

Today’s presentation

• Overview
• Key Findings &

Recommendations

• Lending Programs
• Great Streets Programs
• B-TAP
• Action Steps

Reviewed programs

• Small business lending
• 2% Loan
• Alternative Financing
• Homegrown
• Health and Safety
• Working Capital Guarantee
• Great Streets
• Façade Grant
• Business District Support
• Business Technical Assistance Program (B-

TAP)

Existing Connection to City Policies

Minneapolis 2040

• Policy 8 – Public Safety Though Design

Policy 34 – Cultural Districts

• Policy 55 – Business Innovation & Expansion
• Policy 56 – Supporting Small Businesses
• Policy 58 – Business Districts & Corridors
• Policy 64 – Food Businesses

Strategic & Racial Equity Action Plan (SREAP)

• STRATEGIC NEED - Increase the number of

Minneapolis-based businesses owned by Black, Indigenous, and People of Color (BIPOC); and increase businesses with BIPOC ownership that are still in business after 5 years.

Review Questions

• 1. What’s the objective? How’s it connected to

City goals?

• 2. What’s working?
• 3. What’s not working?
• 4. What’s missing in the portfolio?
• 5. What’s the racial equity intent and/or impact?

Partners

• African Development Center- Nasibu Sareva, Hibo

Abdi, Rich Thomasgard

• African Economic Development Solutions- Gene

Gelgelu

• Bii Gii Wiin- Kit Fordham
• Downtown Council- Dan Collison
• Hennepin Theater Trust- Joan Vorderbruggen
• Hmong American Partnership- Kim Facile, Chong,

Tee (Fouatee) Yang, Susan Pha

• Lake Street Council- Allison Sharkey, Theresa

Swaney

• Latino Economic Development Center- Henry

Jimenez

• Metropolitan Consortium of Community

Developers- Lee Hall, Mara O’Neil, Greg Gramza

• Metropolitan Economic Development Association-

Dan Holmquist, Uri Camarena, Verena Getahun

• Native American Community Development

Institute- Robert Lilligren

• Neighborhood Development Center- Shahir Ahmed
• New American Development Center- Asad Aliweyd
• Northeast Bank- Dusten Johnson
• Northeast Minneapolis Chamber- Christine Levens
• Northside Economic Opportunity Network- Warren

McLean, Stephen Obayuwana, Ann Fix

• Powderhorn Park Neighborhood Association-

Tabitha Montgomery

• Seward Redesign- Renee Spillum, Shaina Brassard
• Southwest Business Association- Roger Worm
• Sunrise Bank- David Scott
• West Bank Business Association- Jamie Schumacher
• West Broadway Business and Area Coalition- DeVon

Nolan, Felicia Perry

Staff Team

• Becky Shaw, Sr. Economic

Development Specialist

• Emily Peterson, Business

Training Coordinator

• Erik Hansen, Director

Economic Policy & Development

• Jim Terrell, Principal Project

Coordinator

• Judy Moses, Sr. Economic

Development Specialist

• Lisa Passus, Project

Coordinator

• Miles Mercer, Manager

Business Development

• Rebecca Parrell, Sr. Project

Coordinator

• Zoe Thiel, Manager Small

Business Team

City of Minneapolis

Key Findings & Recommendations

Achieving Results with Room for Im Improvement

• Connected to 2040
• Outcomes proportionally exceed

BIPOC representation

• Success relies on City’s community-

based organization network

• Incomplete Data
• Remaining Questions

Refine & align programs to increases

• utcomes
• Track demographics
• Encourage collaboration
• Implement communications &

marketing plan

• Increase direct services access
• Continue barrier identification

City of Minneapolis

Lending Programs

Loan programs

• 2% Loan
• Alternative Financing
• Home Grown
• Health & Safety
• Working Capital

$403,729 $149,578 $445,854 $112,067 $223,541 $50,305 $46,351 $48,825 $50,517 $47,964

2% Loan Average Amounts, by race (2014-2018)

Average of CPED Amount Average of Match Amount White (n=109) African-American (n=27) Asian/Pac. Islander (n=15) Hispanic (n=12) People of Color Avg. (n=54)

Lending programs provide BIP IPOC businesses access to capital

Overall

• Effective at financing physical capital
• 2% is the most used program
• Low default rate
• 40 partners – 5 doing majority of lending
• Alternative Financing program drop off
• Limited use of other loan tools

SREAP

• 1/3 of borrowers are BIPOC
• Private loan match 80% higher for white

borrowers

• Unknown total borrower pipeline

Need

• Est - ½ deals would not occur without 2%
• Working Capital access
• Property acquisition, and vehicles

City of Minneapolis

Great Streets Program

Façade

$19,020 $25,050 $32,500 $38,580 $43,200 $52,900 $60,520 $124,800 $143,723

Individual Business Marketing Public Art and Placemaking Business District Physical Improvements Construction Mitigation Organizational Development Business Engagement and Outreach Business District Marketing Events Creating Marketplaces

Great Streets Business District Support Funds Awarded by Type, 2019

BDS

Great Streets builds capacity for community

• rganizations

Overall

• Provides tools for community-based organizations
• Limited participant data
• Gaps in community-based partner coverage
• Awareness, geography, & classification barriers

Façade

• Steady Usage – 100/year
• Private match varies
• Restricted eligible uses
• Bidding, contract payment, & match barriers

Business District Support

• BDS helps build organizational capacity
• Restrictions on repetitive use of funds
• Difficult to evaluate direct impact to businesses

City of Minneapolis

Business Technical Assistance Program (B-TAP)

B-TAP (C (Core)

B-TAP funds community-based organizations to provide business consulting services to support new business development, retention, and

• growth. B-TAP allows the City to expand its capacity by contracting with

local, non-profit, business development organizations that already have community organizing power, cultural competency and technical skills. B- TAP contracts are given annually

3% 9% 4% 59% 15% 10% 1% 3% 4% 14% 78% 1% 10% 6% 19% 64% 5%

Native American Hispanic Asian / Pacific Islander Black or African- American (Inc. African Immigrant) White All other, two or more races

Demographics of B-TAP Participants, 2018

B-TAP Participants (2018) Minneapolis Business Ownership (2012)* Minneapolis Population (2018)**

B-TAP supports BIPOC entrepreneurs

Overall

• B-TAP only represents a portion of entrepreneurs

receiving technical assistance from service providers

• Top categories - food-based, retail, health care,

personal services

• Client experience varies
• CDBG funds limit eligibility

SREAP

• 85% of the 400 entrepreneurs receiving services are

BIPOC

• Data collection and outcome tracking system

inconsistent Opportunities

• Improve contracting requirements
• Build awareness of program
• Establish and track relationships

City of Minneapolis

Action Steps

Next xt Steps

• Move B-TAP
• Program modifications
• Marketing campaign
• Data collection process
• Role of external advisors
• Periodic review timeline

Program Changes

2% Loan

Increase eligible uses Increase lending limits Assist in property acquisition

Great Streets

Align with 2020 budget & Minneapolis 2040 Review program guidelines & materials

B-TAP

Review & refine contracting Develop Co-op enhancements

Other programs

Maintain Alternative and Homegrown & continue evaluation Discontinue Heath & Safety Develop Commercial Property Development Fund

Small Business Program Review

Erik Hansen, Director of Economic Policy & Development

January 7, 2020