Wall St. and Business Wednesdays: Lawmakers Reform Black Business Loan Program by Monica Hatcher
The State Senate Monday moved to reorganize the way loans flow to black business owners who struggle to get financing from traditional lenders, ending a protracted disagreement between state organizations that nearly derailed the funding program.
The senate approved a bill on Monday that would strip the Florida Black Business Investment Board, or FBBIB, of the authority to distribute funds to eight locally organized and funded lending entities and instead give it to the state Office of Tourism, Trade, and Economic Development.
Rep. Jennifer Carroll, R-Jacksonville, who has led the charge to reform the program, said years of confusion had pushed the Black Business Loan Program to the brink.
For the first time in its history, the program last year went unfunded after lawmakers failed to pass a bill resolving organizational problems.
The board itself had to close its office in Orlando and shed all but one employee -- interim-president Keevin Williams.
Citing uncertainty over how the loan money was being used at the local level, the board in 2002 refused to distribute funds to the nonprofit investment corporations. These local investment corporations are supposed to be certified by the board each year by meeting certain performance measures.
''The board was reporting to the state that we were not lending to the clientele we were supposed to be lending to, that we were mixing funds, that we didn't have the appropriate business planning instruments,'' said Michael Carn, president and chief executive officer of Metro-Broward, the investment company serving Broward County.
Rep. Carroll described the impasse as a breakdown in communications over accountability and performance measures.
Since its inception in 1985, the Black Business Loan Program, has leveraged roughly $9 million in state funds to provide more than $70 million in loans to black business owners, through partnerships with private lenders, according to an 2002 audit by accounting firm KPMG.
In late 2005, after much wrangling, the board agreed to release about $1.8 million it had withheld over the three year period. Last year, the auditor general was called into clear up the misunderstanding once and for all.
''They sided with the local organizations,'' Carroll said. ``It gave us, and myself, much better credibility to move forward with the program.''
With the Senate's approval of the bill, which has already passed the House, the remaining link is $3 million in funding -- double the usual amount -- that must still be approved in the state's budget.
Carroll said that was on course for funding, meaning the program should be able to resume its goal of increasing the number of black-owned businesses in Florida.
The FBBIB will serve as an advisory role, and provide networking for the businesses.
All's well that end's well as far as the board's Williams is concerned.
''It shows that despite the problems the state legislature still finds there is some value in the program,'' Williams said. ``That's an important message to send black entrepreneurs and black enterprises in Florida.''
Monica Hatcher can be contacted via E-mail at: mhatcher@MiamiHerald.com
Note: This article was first posted/published in The Miami Herald on May 1, 2007
Wednesday, May 2, 2007