KINGSPORT — The city of Kingsport is working on revitalizing the idea of a small business loan pool program and has enlisted the help of a former Johnson City official to help craft the program.
Bridgett Massengill, who served as the executive director of the Johnson City Development Authority from 2004 to 2007, has been hired by Kingsport on a three-month basis to consult on a couple of downtown projects.
One of those projects is to try and get the loan pool program up and running again, but in a different way, Massengill said.
“The old one was a broad loan, available to anyone within the city, and it was just targeted to businesses who could not get access to capital,” she said. “What we’re looking at now is finding something that is specifically targeted for downtown. We’re looking to try to find a loan program, specifically for Kingsport, to help the small businesses that are coming in.”
Massengill, who crafted a downtown loan program during her tenure at the JCDA, said Kingsport’s new loan pool would only be for downtown businesses.
“It’s another tool to offer people who aren’t doing as large-scale project as TIF (tax increment financing) would require, but for smaller scale renovation projects,” she said. “It’s to make downtown more appealing and give it a competitive edge for financing opportunities they wouldn’t get in other parts of the city.”
Alderman Ken Marsh proposed the original micro loan program more than three years ago, with its goal being a group of local banks would loan money to people who could not secure traditional loans.
The program, however, never managed to actually loan any money for a couple of reasons — less than expected funding commitments from banks, and a failure to obtain nonprofit status from the Internal Revenue Service. The state of Tennessee actually lost the check for the tax-exempt status.
In February, the city chose to dissolve the entity overseeing the loan pool and go with several alternative sources of funding for Kingsport businesses.
Massengill said she’s looking at options to prevent what happened with Kingsport’s micro loan program from happening again.
“We’re looking at our options right now. We’re having conversations, but nothing is set in stone yet to get out there publicly until we have some final meetings with some groups,” Massengill said. “KOSBE (Kingsport Office of Small Business Development and Entrepreneurship) would be the ideal (administrator) because they are the go-to people for financial concerns that businesses have, and right now we’re trying to find the right partners to do the loan program with.”
Johnson City’s loan pool is housed under the First Tennessee Development District, which could be an option for Kingsport’s new loan pool, Massengill said, adding she hopes to have the loan pool finalized by December.