Fayetteville’s minority-owned businesses last week voted unanimously by the Fayetteville City Council to donate $2.5 million in American Rescue Plan funds to match state grants that expired at the end of December. After approving, you will find support and financial support to grow the company.
Robert Van Johns, president of the Fayetteville-Cumberland County Economic Development Authority, said the Community Equity Venture Fund will help minority companies “overcome hurdles” by providing interest-free capital, allowing them to replace traditional businesses. It said it was designed to support lending models.
“The fund’s goal is to grow 10 companies with 10 or more employees each within five years,” Van Geons said at a special meeting held Tuesday evening.
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North Carolina has allocated $2.5 million to the Community Development Foundation to launch the fund, contingent on securing equivalent funding by Dec. 31, Van Geons said.
Council members originally approved a match of $1.25 million to be subject to legal review at the December 12 meeting, with the remaining $1.25 million expected to come from Cumberland County.
The county board was split 4-2 at its December 19 meeting and disapproved of the county game going forward.
Commissioners Jimmy Keef and Michael Booth voted for the match, while Commission Chairman Toni Stewart, Vice Chairman Glenn Adams, and Commissioners Janet Council and Jones voted against.
Mr Van Geons told the commissioner that he could withdraw $12,500 for each new job created, but those funds would have to be repaid if the jobs were not maintained.
Adams said it sounds like the county is holding its own funds appropriated.
County attorney Robert Hasty said the proposed contract includes a $12,500 repayment clause because county funds cannot be used for loans or grants.
Adams said the agreement appears to be trying to circumvent state law.
Stewart said he doesn’t feel comfortable voting if a disclaimer is required.
At a city council meeting on Tuesday, Mayor Doug Hewett told lawmakers that matching funds from the city would not come from the city’s taxpayer-generated General Fund, but from the American Relief Plan Act the city previously received. Told.
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Information technology and refurbishment projects originally planned to be covered by the American Rescue Act Plan funds will be deferred to allow for reconciliation.
“But you rarely get $2.5 million for $2.5 million,” says Hewett.
Van Johns told city councilors that the county was looking to “build their engagement differently” and hadn’t had enough time to return to the county.
How the Fund Supports Minority Businesses
At the council’s Dec. 12 meeting, Van Geons said the North Carolina legislature had approved an economic equity venture capital fund and the state’s unity to promote locally owned minority businesses that serve government agencies. was created.
Mayor Mitch Colvin said the city’s inequality survey revealed that only 0.06% of minority businesses do business with the city government.
Alderman Deno Hondros said he believes economic equity venture capital funds can help boost that percentage.
“This will help small entrepreneurs and minority owners scale up to provide the services the city needs,” Hondros said.
According to Van Geons, the fund will help remove “historic barriers to funding small minority-owned businesses.”
As an example, a small business providing interior painting services to a city may suddenly need a painting truck to reach upper floors.
Mr Van Geons said he had heard stories of local business owners selling trees from their family’s land just to cover the costs of their business.
The Economic Equity Venture Fund will provide the financing. For debt forgiveness, companies need to create a certain number of jobs, Van Johns said.
Priority will be given to minority-owned small businesses operating within low- to middle-income census districts, followed by businesses employing individuals from these census districts.
“We are starting initially by focusing on companies that can serve the needs of the public, preserve the local dollar and offer those goods and services to our institutional partners,” said Van Geons. says Mr.
The fund is managed by the nonprofit Cumberland Community Development Foundation and works with partners such as Fayetteville State University and the Center for Economic Empowerment and Development to help small businesses find a business plan if they don’t have one, according to Van Geons. We plan to support it.
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Van Johns said city officials, local and business advisers and some private companies will help guide the companies.
“Our goal is to rock them, and that’s one of the other reasons we’re starting and helping provide local opportunities,” he said.
Staff Writer Rachael Riley can be reached at rriley@fayobserver.com or 910-486-3528.