SEED Program Provides Business Training and $385K in Microloans to Local Entrepreneurs, Generating 52 New Capital Region Jobs

From the UAlbany News Center

Partnership with UAlbany, SEFCU and Empire State Development Demonstrates Success

Top (l-r): Peter Wohl, Capital Region Director, Empire State Development, George Philip, President, University at Albany, Michael Castellana, President & CEO, SEFCU. Bottom (l-r): William Brigham, Director, Small Business Development Center, University at Albany, SEED participants Patricia Greenwood, Bruce Evans and John Robinson (Photo Mark Schmidt).

ALBANY, N.Y. (January 25, 2012) – In just six months, the University at Albany’s Small Enterprise Economic Development (SEED) program has invested $385,000 in the Capital District and created 52 new jobs. This unique job-creation partnership between UAlbany, SEFCU and Empire State Development (ESD) is the Capital Region's first character-based microloan program.

The SEED program links faculty, staff and graduate students from the UAlbany School of Social Welfare, the UAlbany School of Business and its Small Business Development Center (SBDC) with $2.5 million in financial support from SEFCU and $96,700 from ESD. It is designed to stimulate the creation and growth of small businesses in the Capital Region.

“The program’s key objective is to improve local economies in the Capital Region and surrounding counties by promoting and fostering small business and microenterprise development. We are pleased with the SEED program’s early success,” said UAlbany President George M. Philip. “It illustrates the role of a research university in job creation and is a superb example of public-private partnership. We are grateful to SEFCU and Empire State Development for sharing in this vision.”

To date, 16 entrepreneurs have received business training from SBDC staff and faculty as well as professional volunteers. Eleven entrepreneurs have received loan approvals. The individual entrepreneurial business ventures range from a web portal for young people with disabilities to restaurants, taxi and concierge services, a spa and a recyclables redemption center. The third round of training is now underway and comprises 10 individuals who are in their fourth week of the eight-week course.

During the training, program participants learn the key components of small business ownership such as business planning, legal issues, marketing, and financial management. The training team consists of a program coordinator, UAlbany interns, and business community volunteers who serve as mentors assisting candidates with the development of their business models and provide social support, including capacity building.

“In today’s economic environment, it is essential to give small businesses the necessary training and access to capital to make their company a success,” said Michael J. Castellana, SEFCU President and CEO. “Through this unique program, we have enabled 11 companies to plant roots and add jobs as well as economic vitality to the region,” Castellana added.

The SEFCU revolving loan fund serves as the financing mechanism, using character-based lending as one of several underwriting criteria. This non-traditional form of lending assesses an entrepreneur’s creditworthiness based on his or her relevant expertise, entrepreneurship, knowledge of the pertinent market, and ability to handle crises. The project is piloting character-based assessments so that more credit can be extended to populations historically left out of small business investments and loans. The famous Grameen Bank model first popularized character-based microlending.

“The SBDC is in the business of supporting entrepreneurs,” said William Brigham, director, UAlbany’s Small Business Development Center. “Through the SEED program, we’re pleased to provide this enhanced model of alternative lending and comprehensive support.”

This pilot project has created new firms and jobs at a more rapid rate than conventional entrepreneurial assistance programs, according to research presented in UAlbany’s School of Business Dean Donald S. Siegel’s book, Innovation, Entrepreneurship, and Technological Change.

According to Siegel, the reason the SEED program “outperforms” other conventional entrepreneurial assistance programs is because it is targeted to those who are falling through the cracks, such as worthy entrepreneurs who cannot secure loans based on standard financial criteria and the need for technical assistance to start and expand their companies. The combination of character-loans and mentoring from UAlbany faculty, staff and students allows these firms to access financial capital and add workers.

“The SEED program exemplifies Governor Cuomo’s goals of forging public-private partnerships that leverage state resources to generate economic growth and create jobs,” said Empire State Development Capital Region Regional Director Peter Wohl. “This one of a kind program was created as a result of the hard work and collaboration of the University at Albany, SEFCU and ESD and is quickly proving that SEED not only works, but is a real model for small business, character-based lending initiatives across our state.”

Individuals may apply to participate in the SEED program by contacting Ryan Busch, Program Coordinator at (518) 485-7697 or via email at rbusch@albany.edu.

About SEFCU
Established in 1934, today SEFCU is among the 50 largest credit unions in the U.S. with more than $2.2 billion in assets, over 230,000 members, and 44 branches in the Capital Region, Binghamton, Syracuse, and Buffalo. In addition to full service retail and commercial banking products and services, SEFCU is committed to supporting the community through the donation of time and talent of its staff and members, as well as monetary contributions to help people and make an impact in the communities it serves.