• Capital Access for Small & Minority Owned Businesses in Greater St. Louis

    Oct 25, 2016

    The St. Louis Regional Chamber, Regions Bank, and the Initiative for Competitive Inner Cities partnered to bring the Inner City Capital Connections (ICCC) program to St. Louis on September 29th at Washington University in St. Louis.  107 companies attended the program that provides training, financial education, and networking.  Businesses are mentored by bankers who specialize in small business lending and engage in learning modules where they are instructed by business experts and renowned academics.  The ultimate goal of the program is to provide growth businesses in urban areas with the resources and connections they need to attract capital and expand their business.  Of the 107 ICCC attendees, 68% of the businesses were minority-owned and 35% of the businesses were women owned.  Industries include accommodation & food service, business services, construction, education, health care & social assistance, manufacturing, media & publishing, technology & software development, transportation & logistics, and wholesale & retail trade.  In 2014, 90% of ICCC participants nationally were able to raise debt capital and 100% of ICCC participants were able to raise equity less than 1 year after their completion of the program. This program advances several aspects of the Chamber’s regional strategic plan including: economic development as well as inclusion & entrepreneurship.

    Small business financing is particularly important as small businesses have such a large impact on employment and economic development in the U.S.  Small businesses are not only responsible for employing nearly half of all private sector workers but have also been responsible for 64% of all new jobs created since 1995. Research has found that obtaining a business loan has a strong effect on the long-term financial position of a small business and that small businesses that receive funding are much more likely to continue to operate and enjoy higher revenues in the future.  The Small Business Administration (SBA) administers loans in the region through their 7(a) loan program and their CDC/504 loan program.  The SBA 7(a) loan program helps new and existing small business with financing while the CDC/504 loan program provides long-term financing for equipment and real estate. These loans are issued by local financial institutions but are guaranteed by the SBA.  The average small business loan in the St. Louis MSA for all reporting financial institutions in 2014 was $45,411 which exceeded the national average for small business loans of $38,265. SBA 7(a) loans are typically much larger than the standard small business loan, with the average 2015 7(a) loan in the St. Louis region equal to $342,038.

    ST. LOUIS MSA SMALL BUSINESS ADMINISTRATION LOANS - FY 2015.

       Loans Approved   Total Amount of Loans    Average Loan 
     SBA 7(a)  553  $189,147,100  $342,038
     CDC/504  47  $36,033,000  $766,660
     Total  600  $225,180,100  $375,300


    Capital financing can be a particularly difficult problem for women and minority owned businesses who are typically far less likely to apply for loans than their male and nonminority counterparts for fear of denial.  New minority businesses are also significantly more likely to be denied for loans, even after controlling for factors such as organizational structure, credit score, and type of business.  The large growth in payroll, revenues, and employees that has been driven by a surge in the number of minority and women owned firms in the St. Louis region over the last several years highlights the importance of these businesses as growth drivers for wages, employment, and economic mobility.  However, the latest available data suggests that the revenues of these businesses continue to lag behind other firms.  St. Louis is prioritizing small & medium sized businesses and women & minority owned businesses by promoting programs, such as the SBA Loan Programs and Inner City Capital Connections (ICCC), that will help these companies attract capital and scale their operations.

    Sources: Inner City Capital Connections, U.S. Small Business Administration, Federal Financial Institutions Examination Council, U.S. Census Bureau, Inc.com, California Association for Micro Enterprise Opportunity, OECD, International Journal of Business and Management.

  • The St. Louis Metro Export Plan

    Jul 18, 2016

    On July 28, members of the St. Louis business community gathered at Washington University in St. Louis to celebrate the launch of the St. Louis Metro Export Plan. This joint venture between the St. Louis Economic Development Partnership and World Trade Center St. Louis aims to transform the metropolitan area from a well-known industrial hub to an export powerhouse.  The export plan’s launch follows a year-long study by the Global Cities Initiative, a project conducted by JPMorgan Chase and the Brookings Institution, which encourages metropolitan areas to boost their economies through competitive international trade. The World Trade Center St. Louis led the application process for the region to be selected as one of the 28 metros in the project.

    St. Louis Mayor Francis Slay stated that “St. Louis is taking a leadership position” with the export plan and that the region is eager to compete in the global market. St. Louis County Executive Steve Stenger mentioned that small to medium businesses and startups are a particular focus of the export plan, capitalizing on the region’s innovative ecosystem.

    Along with the launch of the export plan, World Trade Center St. Louis Executive Director Tim Nowak announced the creation of the St. Louis Trade Commission, a task force housed in the World Trade Center St. Louis that is responsible for helping regional businesses and organizations find information about the exporting trade and opportunities in foreign markets. The St. Louis Regional Chamber will assist in funding the St. Louis Trade Commission for the next three years. The Chamber was also involved in advocating for St. Louis’ selection for the Global Cities Initiative last year.

    In addition, America’s Central Port Executive Director Dennis Wilmsmeyer, who also acted as the chair of the St. Louis Global Cities Steering Committee, announced the launch of the St. Louis Export Challenge. This competition is aimed at small and medium-sized businesses as well as startups to develop exports plans in the hopes of winning a $125,000 prize from JPMorgan Chase. Mayor Slay, County Executive Stenger, Mr. Nowak and St. Louis Economic Development Partnership CEO Shelia Sweeney unveiled the prize check to the audience at the event.

     Export Plan photo
    (From left to right) County Executive Steve Stenger, St. Louis Economic Development Partnership CEO Shelia Sweeney, JPMorgan Chase Division Manager & Executive Director Craig Hortsmann, World Trade Center St. Louis Executive Director Tim Nowak and St. Louis Mayor Francis Slay unveil the $125,000 prize check for the Accelerate St. Louis Export Challenge on June 28, 2016.


    To see the Metro St. Louis Export Plan, click here.

    To learn more about the St. Louis Export Challenge, click here.