By Brian Brus
Courtesy of The Journal Record
OKLAHOMA CITY – A $2 million partnership between nonprofit i2E Inc. and the Oklahoma City municipal government to provide venture growth capital will launch this month, i2E Chief Executive Scott Meacham said.
The GrowOKC Fund small business revolving loan program was approved by the city’s Economic Development Trust in August. The Greater Oklahoma City Chamber is also providing resources to help get the program started, Meacham said.
“This partnership will help the city’s small businesses close what we believe is a critical capital gap in access to growth capital, which is necessary for the financing of expansion projects and the creation of new jobs,” he said.
Cathy O’Connor, president and CEO for the Alliance for Economic Development of Oklahoma City, and Brent Bryant, City Hall’s economic development program manager, both agreed with Meacham that most economic investment programs are designed to help bigger companies. The Grow OKC plan will boost small to midsize business development, they said.
The i2E committed $1 million to the effort from its GrowOK Fund, which is part of the federal State Small Business Credit Initiative funds it manages on behalf of the U.S. Department of Treasury and the Oklahoma Department of Commerce.
The Alliance, a semi-government agency that coordinates and manages projects involving partner entities such as the Urban Renewal Authority, Oklahoma Industries Authority and Oklahoma City Redevelopment Authority, is putting up $1 million in matching city money from a general obligation limited tax, or GOLT, bond fund. That money is available through the city’s Strategic Investment Program SIP low-interest loan program.
The new GrowOKC Fund will focus on existing Oklahoma City small businesses that need growth capital financing in the range of $100,000 to $250,000. The money will be available through low-interest loans and equity and convertible debt investments and it will require a dollar-for-dollar matching investment from the small business in the form of cash, borrowed funds or new equity.
Meacham said GrowOKC won’t compete with local banks, but will instead put businesses in better position to leverage additional bank financing. If a company is approved for participation, i2E will hold an equity stake that further ensures transparency in the process. I2E officials will manage the initial underwriting and will follow up with quarterly reports on those investments.
Funds will only be available for companies retaining or creating primary jobs in areas such as manufacturing, distribution and warehousing and business services. Qualified companies also must be generating revenue from sales of products or services and have positive cash flow. Retail businesses will not qualify.
Meacham said i2E is preparing promotional materials and letting its clients know about the new funds. He said it’s still too early to identify potential candidates. A formal launch is expected within a few weeks.