Of that amount, $10 million would be used for loans to small businesses in the city, made through the Philadelphia Industrial Development Corp (PIDC).
An additional $5 million over five years would be used to provide free classroom education to selected business owners through Community College of Philadelphia.
Another $5 million would go to Lancaster-based Community First Fund to make small-business loans in the 13 counties in central and eastern Pennsylvania it serves, including Chester and Montgomery Counties.
Alan Greenberger, Philadelphia's deputy mayor for economic development, said the Nutter administration is happy that Goldman Sachs chose to bring new private capital and the firm's expertise to small businesses in the city.
Dina Powell, president of the Goldman Sachs Foundation, said her organization is "delighted that Philadelphia is one of our partners." She said Nutter had worked steadily over the last several months to persuade Goldman Sachs to bring 10,000 Small Businesses to the city.
First launched in New York in spring 2010, 10,000 Small Businesses is operating in Chicago; Cleveland; Houston; Long Beach, Calif.; Los Angeles; New Orleans; and Salt Lake City. In addition, lending organizations in Montana and Kentucky received funding to make small-business loans.
So far, more than 1,000 businesses either have received loans or completed the business-education curriculum through the program, according to Goldman Sachs. Powell said she was particularly proud that 99 percent of those selected for the free educational program had graduated.
The program, developed by Babson College in Wellesley, Mass., is considered intense, typically involving 100 hours of coursework, every other Saturday, over a four-month period. Geared toward those already in the thick of operating a business, the modules include understanding financial statements, human resources, leadership, marketing, and operations.
Stephen Curtis, president of Community College of Philadelphia, said he is very impressed by the program Babson and Goldman Sachs have developed. CCP faculty members will be trained by Babson. The college hopes to welcome its first class of 30 businesspeople in May.
"This fits really well for all sorts of reasons," said Curtis, who added that the college runs a number of programs to help businesses develop the skills of their workforces.
The Goldman Sachs initiative represents a "higher-level" effort to address the needs of small-business owners, with the help of a "strong set of organizations," including the PIDC, the Greater Philadelphia Chamber of Commerce, the Greater Philadelphia Hispanic Chamber of Commerce, and the Urban League of Philadelphia, Curtis said.
John Braxton, co-president of the Faculty and Staff Federation of CCP, which represents about 1,300 full- and part-time faculty members and nonsupervisory staff, said the union had been negotiating with the college administration over modifications to its contract to cover the new Goldman Sachs program. He pointed out that faculty have been working without a new contract since August 2011.
Curtis said he did not expect labor issues to affect CCP's ability to launch the 10,000 Small Businesses program.
In committing $300 million for small-business lending, Goldman Sachs chose to use community-development financial institutions as the vehicle to make the loans.
Mark Pinsky, president of the Philadelphia-based Opportunity Finance Network, said CDFIs are private-sector institutions that seek to make a difference in not only economically distressed areas, but overlooked markets and ethnic communities where traditional lenders don't understand the opportunities available.
"Having Goldman Sachs, which is a market maker, decide this is a market where it wants to make investments is a big deal," Pinsky said, referring to Philadelphia.
John Grady, president of the PIDC, which was approved by the Treasury Department as a CDFI in April, agreed. "It reinforces a message important to the mayor that Philadelphia is a great place to start a business and grow a business," he said.
Using the $10 million loan from Goldman Sachs to PIDC, Grady said, he expects his organization to make about 30 to 50 loans, averaging $200,000 to $300,000, in a two-year period to businesses seeking to grow.
How to Become One of 10,000
The Goldman Sachs 10,000 Small Businesses program lists the following requirements for businesses interested in loans or participating in the free training:
The applicant must be an owner or co-owner of a business.
The business must be at least two years old.
Revenue must be between $150,000 and
$4 million in the latest fiscal year.
Businesses must have at least four employees, including the owner.
SOURCE: Goldman Sachs
Contact Mike Armstrong
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