Ohio source for microlending opens Toledo officeWritten by Duane Ramsey | | firstname.lastname@example.org
A new source for microlending will arrive in Northwest Ohio when the Economic and Community Development Institute (ECDI) opens an office in Toledo on May 1.
Based in Columbus, ECDI operates offices in Cleveland and now Toledo to assist small businesses with microenterprise loans in those communities. The Toledo ECDI office will be located in suite 202 at One Maritime Plaza in Downtown Toledo.
“Our goal is to create access to small business capital and provide tools for asset building to create jobs and invigorate our neighborhoods,” said Anneliese Grytafey, manager of EDCI’s Toledo office.
The U.S. Small Business Administration (SBA) defines a microenterprise as any business with five or fewer employees, with initial capitalization requirements of approximately $35,000. The ECDI makes loans of up to $150,000 to small businesses that may not qualify for funding from banks and traditional sources.
Inna Kinney founded ECDI in 2004 as a nonprofit economic development organization in Columbus to invest in people to create measurable social and economic change. Kinney serves as CEO of the organization.
ECDI acts as an SBA microloan intermediary and is the seventh largest SBA microlender in the nation and a U.S. Treasury-designated Community Development Financial Institution.
Grytafey gained expertise in microfinancing while studying national best practices with the Toledo office of Advocates for Basic Legal Equality (ABLE). She developed a program at ABLE to provide legal advice to entrepreneurs.
As an attorney, Grytafey believes her legal background will be helpful in the ECDI operation although she will not be allowed to provide legal advice to its clients. However, ECDI will partner with ABLE to help its clients obtain funding for their small businesses.
Grytafey most recently served as director of strategic initiatives with the Regional Growth Partnership in conjunction with JobsOhio, where she worked toward making Toledo more competitive for federal funding and grants.
Banks are usually one of the largest referral partners for microlending, sending potential borrowers who may not qualify for conventional loans to sources such as ECDI, according to Grytafey. She plans to develop partnerships with local lenders to help expedite that process.
ECDI will provide small business loans to for-profit companies, helping those clients with cash flow, marketing and training as well as technical assistance throughout the life of the loan. Those loans may be used for business expenses such as working capital, startup operating costs and purchase of equipment, inventory and supplies, but not for real estate acquisition or construction.
Grytafey said they will create partnerships with ECDI’s borrowers to provide training through local sources such as Assets Toledo and the Small Business Development Center.
ECDI’s clients could include small home-based businesses, contractors, entrepreneurs, family-owned enterprises and even young people who may want to start a business. Grytafey said she already has received some inquiries from local businesses interested in learning more about the program.
“Microlending is happening all over the U.S. We just didn’t have a dedicated program in Toledo,” said Grytafey, who became involved in a collaboration of efforts to bring microfinancing to Toledo.
Grytafey reported that she and representatives of the Northwest Ohio Development Agency, Toledo-Lucas County Port Authority, United North and United Way visited ECDI in Columbus in January 2012. ECDI leadership came to Toledo that April for a community forum on microfinancing.
A pre-feasibility study was commissioned by the Toledo Community Development Corporation (CDC) Alliance and funded by a grant from the Ohio CDC Association. In a debriefing session after the study, Jason Friedman of Friedman Associates, one of the nation’s top sources of expertise on domestic microfinance, suggested that the local committee connect with ECDI.
An analysis conducted by Friedman’s firm showed a $15 million funding gap that could be filled by microcredit loan products in the Toledo/Lucas County market. That study was commissioned by ABLE and funded by a grant obtained through the Port Authority.
ECDI programs and services, supported by more than $40 million in federal, state, local and private funds, have proven to create jobs, increase access to assets and spur local economic development, according to ECDI’s website.
For more information, visit www.ecdi.org.