NEWS - Economic Development

by Emily Mathis
SBJ Staff

Tony O’Reilly isn’t going to sugarcoat it - the economy’s bad.

“Its tough right now, unemployment, spending down, overall markets are down, also access to capital is difficult,” he said.

O’Reilly, a Savannahian by way of Southern California should know. As president and founder of the Savannah Business Assistance Corporation (SBAC) he works in the trenches of this sour economy. O’Reilly’s non-profit is often the last hope for cash-strapped hopeful entrepreneurs with a dream, and small business owners with an eye for expansion.

“We’re trying to make deals happen, we’re in tune in a sense, working with people struggling in a bad economy, every day,” O’Reilly said.

The SBAC matches their clients with one or more of their several loan programs that range from the SBA 7(a) General Purpose Loan, worth anywhere from $50,000 to $2,000,000, to the Small Steps to Success loan worth $2,500 for the first year. Most of the smaller loans, such as the Small Steps to Success are directly funded by the SBAC or City of Savannah. But for the big loans like the 7(a) General Purpose, the SBAC acts as the guarantor for the business owner taking a loan out from the bank, therefore making it significantly easier for the owner to actually get the loan. In the midst of nervous banks trying to figure out new regulations and thus tightening up on loans, the SBAC’s role in a deal between borrower and bank can be a crucial component.

Just ask Mike Ayers, co-founder of Structured Green, a furniture designer and manufacturer in Savannah, who says he knows a thing or two about bank tightening. Three years ago, when Structured Green was still run out of Ayers’ house, the company found itself with empty pockets and an order from the state of Georgia that needed to be filled.

“We needed cash fast, the banks were saying no, even with the contract from the state in our hands,” Ayers said.

Acting on advice from a representative at The Creative Coast, Ayers turned to the SBAC whose first loan helped them fulfill the order and marked the start of a fruitful relationship for Ayers. Since that first loan, Structured Green has never gone through the bank for a loan, but gotten one through the SBAC for the past three years. Last year’s loan bought a new sander for Structure Green, a purchase that significantly increased productivity for the company. Before the sander, Ayers said it would take three to four days just to sand down a table that now only takes 20 minutes.

Structured Green also used the loan to buy a machine that can put a customer’s design into the computer and create a model of it instantly, in-shop. Before, someone had to drive from their headquarters on 35th St. to a subcontractor company in Thunderbolt. Ayers said with the new machine, a customer that calls at 9 in morning will have something to look at by the afternoon. Before it might have taken a week to show the customer something, since they were dependent on an outside source.

“It would have been much more difficult without them, definitely would have taken us longer to grow…before we weren’t really able to really be looking at projects,” Ayers said.

Three years since their first SBAC loan, Ayers was happy to show off freshly made nightstands the company had made for a boutique hotel in Baltimore, Maryland, and spoke hopefully about a handful of potential projects for national realtors.

The idea behind Structured Green, to create furniture from old parts, such as a table made out an old conveyor belt, certainly wasn’t a risk-free business deal. But its rise to success exemplifies what O’Reilly sees is the faint trace of a silver lining in this poor economy.

“There is always opportunity in the right situation and in high unemployment times; people decide to try and start a business, make a living, its business out of necessity,” O’Reilly said.

At least according to O’Reilly’s numbers, a bad economy and double-digit unemployment hasn’t killed Savannahians’ spirit of entrepreneurship. The SBAC has had more loan applicants this year than last. As of May this year, the SBAC had funded 81 loans totaling $6,677,000, with a goal of funding 300 by the end of the year.

The overwhelming majority of those loans (63) came from the MLK special interest loan. The MLK loan is funded by the City of Savannah and covers businesses on MLK and Montgomery Streets. It is also an example of the SBAC’s microloans, which are all funded by the SBAC or the City of Savannah, and can lend up to $35,000 without ever involving a bank.

Last summer, an MLK specialty loan helped Melody and Juan Rodriguez, owners of the nine-year-old Rancho Alegre on Posey St. on the Southside, expand their Latin flavor to MLK. The owners had been hearing for a while that their Posey St. location was less than convenient for their downtown and island area patrons. So in the midst of a bad economy, they took the risk to expand and acting upon advice by their personal bankers, looked to the SBAC for advice.

“They certainly pushed us to take that risk and get us out there,” Melody Rodriguez said. “I wouldn’t have been able to start it without the loan; regular interest rates were not the best situation. This is a lot more convenient,” Rodriguez continued.

For another local recipient of the SBAC’s SBA 7(a) loan, the choice to go through the SBAC was an easy one.

“That’s what they’re there for isn’t it?” said Michael Meeks, co-owner of downtown café, Goose Feathers. In June, Goose Feathers received the Chamber of Commerce’s award for Best Hospitality Small Business. Meeks pointed to the low interest rates and convenience of the SBAC for reasons why they keep going back, exemplifying a point O’Reilly wants to drive home.

“The economic environment is sour, but the business development services is fairly rich - a lot out there a business person can take advantage of,” O’Reilly said.

As the success of the SBAC’s clients proves, economic hard times don’t necessarily mean the death of an entrepreneur's dreams.