Letter from the Founder

By William J. Grinker

For Seedco Financial, tangible results relate to how much financing we are able to put on the street and what outcomes we ascertain or project as a result of these efforts. We have examples of this in the communities in which we work, but perhaps the best example is our experience in creating the Lower Manhattan Small Business and Workforce Retention Project (LMSB&WRP) after the attacks of 9/11.

From October 2001, when the program began until its conclusion at the end of June 2004, we were able to raise and disburse over $44 million in private (60%) and public (40%) support. The program offered a customized package of grants, loans, and wage subsidies for low-wage workers and technical assistance to meet the special needs of very small businesses in the throes of dealing with an economic disaster. Traditional lending practices were turned on their head by emphasizing the needs of the businesses as the key determinant rather than their supposed credit worthiness. Although conventional wisdom predicted that default rates would be extreme, in fact our default and loss rates (19 and 8 percent respectively) are just as good as or better than those of conventional bank/SBA small business financing. Also, where traditional models of emergency financial assistance offer a one-size-fits-all package, we customized the assistance to meet the needs of individual businesses and their employees. We were able to provide the following resources to over 1,350 businesses: grants (about 850) to cover direct losses at an average amount of $9,000; loans (about 450) at a average amount of $42,000; wage subsidies for 1,350 low-wage employees (at a cost of about $1,300 per worker); and technical assistance to almost 400 businesses on topics such as insurance claims, real estate leases, and transportation. Over 6,000 jobs were saved and an independent study by the National Community Capital Association (NCCA) and New York University found that over 70% of the businesses served reported that they benefited more from Seedco's services than those of any other disaster relief organization. An outcome of considerable importance to us was that over 40% of the businesses served were owned by minority or women entrepreneurs and 30% were immigrant-owned. Our receipt of the Wachovia Bank Excellence Award for Community Impact at the 2005 NCCA meeting was a result of LMSB&WRP. The experience of establishing the right mix of services has also led to our opening an office in New Orleans. We are creating a similar package of services there and in other Gulf Coast communities hit by the hurricanes.