Jax City Council Approves Small Business Grant Program With VyStar Credit Union

Apr 6, 2020

The Jacksonville City Council unanimously approved a bill Monday to open a City Small Business Relief Program in partnership with VyStar Credit Union. 

Mayor Lenny Curry was expected to quickly sign the bill.

“This was built to deploy money to small businesses fast, within days of going live with the application process,” Curry said in a Monday virtual press conference.

VyStar is opening a $50 million dollar pool of money specifically for small businesses with two to 100 employees to apply for a loan of up to $100,000.  

According to the bill’s language, the business must be located in Duval County, have been in operations for at least a year, and can show the negative financial effects of COVID-19.

Related: Local, State And National Coronavirus Coverage

The interest rate for the loan is fixed at 5.99% with a repayment plan set for six years total. During the first year, VyStar will only charge interest, and the city will cover that interest-only payment as part of the partnership. 

Loan underwriting fees will be waived. The first 3,000 applicants will also receive an additional $1,000 grant from the city.

After the first year, the city will continue to cover interest on the loans, as long as the business has retained at least 50% of their employees since February 29.

If businesses keep all of their employees in years two through six of the repayment plan, they could receive up to 50% of the principal back from the loan through the city.

Curry says the process from application to approval should only take three to five days.

In the bill, there is a list of so-called undesirable businesses that might struggle to get a loan for the program. They include: adult entertainment, bars, casinos and gambling establishments, marijuana-related businesses, dry cleaners, and gas stations. 

Still, VyStar says those businesses should give the application process a shot.

“Those are usually organizations that we wouldn't work with because of credit,” said Jenny Vipperman, the Chief Lending Officer for Vystar. “The only ones we wouldn't work with in this program is any businesses involved in illegal activity. So there's a small number that do things that are not legal, those we would continue not to work with. But otherwise, we'll work with bars, restaurants, all of those others.”

To open up the application process to even more businesses, VyStar said they are waiving the minimum credit score requirement. Instead, the credit union will base the businesses eligibility on last year’s income. 

There is also no minimum amount on the loan to apply for.

“I think a lot of times with banks, you're looking for a loan that's big enough to justify all the work you put into it,” said Vipperman. “That is not what we're doing here. We want to make sure even if it's a very small amount that they qualify that we get them that loan.” 

City Officials said this is just one step of the plan to mitigate the economic impacts of the coronavirus.

“This is the first of what will probably be many actions that we take,” said Brian Hughes, Jacksonville’s Chief Administrative Officer. “We'll look for partnerships wherever they make sense.”

While the City Council ultimately decided to unanimously approve the program, there were a few concerns raised by council members about its implementation. 

Councilman Al Ferraro asked how smaller businesses with very limited staff will be helped to ensure they can get through this process easily. 

VyStar officials said they’ve set aside employees to specifically work on the program to help make the process as seamless as it can get for small businesses. 

Two City Council members wanted to know if businesses who are deemed non-essential and are already closed would get prioritized in the application process, so they can get needed funds first. 

“The idea of us internally, EOD [Department of Economic Opportunity] or otherwise, having to review thousands of applications and make sort of determinations of ‘this business, not that one, this one because it's this type or that,’ the amount of time that would add to the process for us at least would be considerable,” said Hughes. 

Instead, Hughes said businesses who are already closed should be the first ones to reach out to VyStar. 

The city has allocated $26 million to fund the grants over the next six years. 

“There are small businesses that are doing pretty good surviving because they're in an essential area,” Hughes said. “They're not feeling as much pain as others, the potential is there for businesses like that to even potentially come into the loan program and use the capital to hire up people now, with so many unemployed.

Hughes said some of the money the city spends can potentially be reimbursed at the state and federal level, but right now local officials aren’t counting on a reimbursement.

Businesses interested in applying for the Small Business Grant Program can do so here

Sky Lebron can be reached at slebron@wjct.org, 904-358-6319 or on Twitter at @SkylerLebron.