A $10 million state economic stimulus plan created by Gov. Charlie Crist has generated just 45 new jobs in its unfinished first year.
Last January, as he announced the Economic Gardening Business Loan Program, the governor expressed confidence it would produce a large number of new sustainable jobs while planting the seeds that our homegrown businesses need to flourish.
Crists office issued a statement at the time, calling the economic stimulus plan an economic development approach based on research and real-world applications showing that a small group of high-growth, high-potential businesses can generate a large number of new sustainable jobs
Sarasota businessman Hidayet Kutat has used one of the economic gardening loans to hire a marketing person and uncouple his business from the states construction industry.
The owner of Gulf Coast Signs of Sarasota has used his $250,000 loan from the state to try to expand from manufacturing and installing signs used by the construction and real-estate industry, to producing Americans with Disabilities Act signs and using wide-format digital printing to create banners.
Basically, our goal is to divorce ourselves from the construction industry, he said.
Gulf Coast Signs hadnt hired anyone since 2008, Kutat said. But after getting the loan, the company brought on a marketing person. Kutat said he is on his way to hiring a second new employee as he pursues a plan to expand the business, and he is investing in new equipment.
Twenty-five businesses have been approved for the stimulus loan program, which has spent half of the $8.5 million allocated. The remaining money is expected to be released soon by the governors Office of Tourism, Trade and Economic Development.
The loans are being administered by the Orlando-based Black Business Investment Fund, which collects a 1 percent origination fee on each loan.
Each loan carries a 2 percent interest rate, to be paid over four years, and a requirement that one full-time staff member be hired for every $50,000 borrowed.
The economic gardening program grants small loans of no less than $50,000 and no more than $250,000 to businesses that generate no less than $1 million and no more than $25 million in annual revenue
Duane Lewis, vice president and senior loan officer for the investment fund, says the program is working.
Its been very successful, he said. Weve exceeded what weve appropriated upfront.
Lewis said there is a waiting list for the loans and the number of jobs will double by the time all of the money is spent.
About 15 percent of the $10 million, or $1.5 million, is currently set aside to support the program through GrowFl, a state technology training and business strategy program managed by the University of Central Florida.
GrowFl is managed by the same person who manages the universitys business incubation program.
GrowFl is set to receive an additional $1 million to $2 million in the new state budget, which took effect June 1, but only if the state receives anticipated federal Medicaid funds.
An additional $2 million would increase the stimulus spending plan to $12 million, with 29 percent of the total going to GrowFl.
The loans, reserved for businesses with no less than 10 and no more than 50 employees, have benefited not only small businesses, but those run by women and minorities. Lewis said the loans have been used all over the state, but most have been awarded to Central and South Florida businesses.
Ellyn Bogdanoff, a Republican state House representative from Fort Lauderdale and chairwoman of the House Tax and Finance Committee, said shes cautiously optimistic about the program.
The months it took to get the fund off the ground (Crist announced the program in January 2009, but it wasn't funded until fall) made her nervous, but she said the loan program was the right way to approach job growth because it allows the private sector to take control of it.
This is the only way to do it, she said.
Reach Alex Tiegen at (561) 329-5389 or atiegen@gmail.com
