YOUNGSTOWN Local small-business program is a success

The Small Business Administration is using Youngstown's program as a model for other cities across the country.
By ROGER G. SMITH
CITY HALL REPORTER
YOUNGSTOWN -- A year ago, Vivo Bros. Millwork was in a classic small-business quandary.
The year-old commercial cabinet maker needed to expand and get out of its small, rented space on Wick Avenue.
Banks wouldn't give the young company a loan to buy a sizable building, however, because it lacked a track record.
About the same time, the city started a program for just such small businesses. The Youngstown-U.S. Small Business Administration Revitalization Initiative combines city financial programs, low-interest bank loans and SBA loan guarantees.
The city approved a forgivable loan that helped Vivo Bros. make the downpayment on a South Side building twice the size of the old North Side shop. One of several banks in the program made the building loan and the SBA backed it.
Vince Vivo is sure the company he and his brother Nick co-own wouldn't be looking at doubled sales today without the program.
"The building is perfect for us. We couldn't have done it without them," he said.
A dozen other city companies are saying the same thing.
How it's working: A year into the Youngstown-SBA initiative, 13 companies have invested nearly $2 million and created more than 200 jobs. Four other companies have pending projects that will invest an additional $1.1 million and create 150 more jobs.
The program is working so well that SBA is urging other cities across the country to copy it this year.
Gil Goldberg, district director of SBA's Cleveland office, called Youngstown's program "immensely successful."
SBA's director of intergovernmental affairs in Washington is shopping the Youngstown model to cities across the country, he said.
Youngstown's program has been a main topic for SBA regional directors across the Midwest in recent months, too, he said. He expects to see similar programs in four to six states in 2002.
Goldberg is impressed with the number -- 17 -- and type of companies getting help in just one year, from steel to computer software, especially considering the national economic downturn.
"It shows we're helping all business across the gamut," he said.
How this began: The program started when city council members approached economic development officials about finding ways to help small businesses in need.
Goldberg credits the city for setting aside the $1.2 million that funds the program. City help for the small businesses is the key part for banks and the SBA, he said.
"That starts to become significant for Youngstown in economic development," he said.
Vince Vivo credits Tameka Woodberry, the program coordinator, for making the initiative work.
A month elapsed between turning in his application and settling the financing, which Vivo called quick. Vivo Bros. started the expansion process in January and was working in its new building by April.
Vivo is a walking advertisement, recommending that other small-business owners who might qualify spend the couple of days it takes filling out the needed paperwork.
"Everything flowed smoothly," he said. "It's definitely worth the time. They'd be foolish not to."
Between 100 and 150 companies have asked about the program to date, Woodberry said, and about 40 companies have applied. Many others are fine-tuning proposals and could become customers later, she said.
Four companies have been turned down after going through the process.
Screening process: Applicants are screened first to see if they qualify for technical business help, such as accounting services. A five-member board, three appointed by the mayor and two by city council, reviews applications and suggests city funding levels.
Companies take city letters of intent to banks to get a loan. Then the companies get the SBA to back the bank loans.
The city gives out its incentives after lenders commit to loans and SBA commits to backing them. The city's control board -- the mayor, finance and law directors -- must approve the deals.
Counting the pending projects for 2001, the city's investment to bring the roughly 365 jobs will total about $438,000 -- about $1,200 a job. An economic development axiom says it costs about $15,000 to create one job, said Jeffrey L. Chagnot, city development director.
"The program has absolutely hit the target," said David Bozanich, deputy city finance director.
rgsmith@vindy.com