July 10--The Economic Development Growth Engine for Memphis & Shelby County is best known for deciding tax incentives for larger companies, but startup loans approved on Thursday for guitar and furniture makers in Memphis and an outpatient clinic in Bartlett marked a new era.
"The expectation was that we would move beyond the big, industrial projects -- still do them, do them better, but move beyond that," said Reid Dulberger, chief executive officer of EDGE.
"We have finally gotten to that point, where we have the tools to help small business."
The EDGE finance committee approved the first two loans, the maximum $25,000 each for fledgling businesses on Broad Avenue in Memphis, from its Inner City Economic Development loan fund. The three-year loans will be forgiven, by one-third each year, in effect becoming grants if planned building, facade and other improvements are completed.
Memphis Guitar Spa, LLC, plans to renovate a retail space and hang a 14-foot guitar sign outside the shop that opened last year at 2561 Broad. Business owner Kevin Ferner custom builds, repairs and restores guitars and plans to add five new jobs paying an average of $25,000 a year over the next five years.
Handcrafted Furniture by Elmore Holmes, at 2542 Broad, is located in a building that had been damaged by fire and was a safety hazard before Holmes bought it and invested more than $225,000 to make the second floor his home and the first floor his shop. The loan will finance facade improvements.
The third loan approved, $50,000 from the EDGE Loan Fund, will help pay for renovations, equipment and working capital for H & M Health and Wellness, a new outpatient clinic at 2840 Summer Oaks in Bartlett. Those loans can range from $50,000 to $250,000.
Business owners Lolita Horton, a nurse practitioner who accepts TennCare, and Stephanie Martin, the administrator, met as employees of a family care practice. The five-year loan's interest is fixed at a prime rate.
The chairwoman of the EDGE finance committee, business consultant Natasha Donerson, recused herself from voting on the clinic loan because Horton and Martin are her tenants, Donerson said.
The Inner City Economic Development Loan funds, now about $933,000, are supplied by the city of Memphis from a fee paid by firms that receive PILOT, or payment-in-lieu-of-taxes, incentives. The EDGE Loan Fund is made up of a $3.65 million federal Economic Development Administration grant matched by $1.28 million from EDGE, officials said.
"This just scratches the surface," Dulberger said. "We anticipate a very robust lending operation to go along with our technical assistance, the Economic Gardening program and the Emerging Leaders program."
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