Credit unions launch grant initiative for startups and small businesses
Jer Michael Terrell Hundley started mowing lawns around the neighborhood at age 13 and built up his lawn maintenance business over the years until he was tragically killed in a gun battle in California in 2013 at the age of 17.
As a tribute to her late son — and as an entrepreneurial venture of her own after serving eight years in the U.S. Army — Hundley’s mother, Shawna Kyle, decided to start her own lawn maintenance and mowing business out of her Eastdale home. She named the venture for her son with his initials JTH Enterprises, and she used his favorite colors — purple, black and gray — on the corporate logo and on the front of the “Boss Lady” mower she uses to cut grass.
The business has grown to four employees, and Kyle is hoping to expand with what she learned from UTC’s Veterans Entrepreneurship Program and the financial backing she got from a $10,000 Idea Leap loan from the Tennessee Valley Federal Credit Union.
“The loan really helped me to buy new and bigger lawn mowers and expand the business when I first got started,” she said.
Kyle is one of 35 small business owners who have tapped into the small business loan program that Chattanooga’s biggest credit union launched two years ago to help startup businesses. The Idea Leap loans provide up to $50,000 to business owners who have completed the program and are recommended by one of the startup assistance or business accelerator programs in Chattanooga, including Co Lab, Launch Chattanooga, the Tennessee Small Business Development Center, Bright--
Bridge, SCORE, the Urban League and Causeway.
So far, Nix said not one of the borrowers has been delinquent in the repayment of their loans, which already total nearly $1 million offered with interest rates from around 7 percent to 9 percent.
The success of the loan program has caused Tennessee Valley Federal Credit Union to allocate $50,000 this year to provide outright grants, or gifts, to small businesses that pitch the best business plans for their ventures during Startup Week in October. The $50,000 of grant money will be split up among five winning businesses. To be eligible, the businesses must have at least a couple of employees and sales of not more than $1.5 million a year.
“We want to support the growing entrepreneurial economy of Chattanooga, whether these businesses do business with us right now or not, because we recognize that a rising tide will lift all boats,” said Todd Fortner, president and CEO of the Tennessee Valley Federal Credit Union.
Loans for startup businesses with no or limited track records or collateral are usually hard, if not impossible, for small businesses to obtain. Kyle said several banks turned her down before she heard about the program at the Tennessee Valley Federal Credit Union.
Tommy Nix, the credit union’s vice president of business and commercial services, said since the “Idea Leap” loans were launched in 2016, the results so far “have been nothing short of phenomenal.”
“We want to use income from these loans to help with these Idea Leap grants, which we hope will encourage the growth of still more businesses,” Nix said.
Brianne Hager used the first Idea Leap loan of $7,000 approved in 2016 to add cooking classes to her B’s Treats at the foot of Signal Mountain.
Michael Rice got a $25,000 loan from Tennessee Valley Federal Credit Union to help open — and soon expand — his Mad Priest Coffee business to cater to those wanting international flavors and desiring of helping those in Third World countries where the coffee beans are grown.
“We got our loan approved within a week of when we applied and it really helped our business get started,” he said.
Rice said he plans later this year to open a storefront on Cherry Street to serve both coffee and alcoholic drinks, along with some food, every day.
Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.