FFC First aims to lend $11M to local businesses amid funding challenges

In the heart of Prince George's County, a pivotal meeting unfolded as the Planning, Housing, and Economic Development Committee gathered to discuss the future of local economic support. The focus was on the Financial Services Corporation (FFC First) and its budgetary challenges, which are increasingly impacting small businesses in the area.

As the meeting commenced, committee members were presented with a detailed overview of FFC First's budget. The organization, dedicated to lending to local businesses, is facing a 1% decrease in its overall budget, with net loan program income projected to drop by 15.2%. This decline is attributed to the sunset of certain programs and a reorganization of its portfolio, particularly affecting the Small Business Administration (SBA) loan program. Despite these setbacks, management and service fees are expected to rise, reflecting growth in non-SBA portfolios.

FFC First has been a cornerstone for local businesses, having closed 34 loans this fiscal year, supporting over 400 jobs and funding $7 million in loans. However, the organization is grappling with significant challenges. Rising interest rates and the expiration of the American Rescue Plan Act (ARPA) grant have constrained its ability to provide essential financial support. The proposed DECADE Act threatens to cut the VLT Flex Fund by 50%, a critical resource for small business financing.

The committee members expressed concern over these funding cuts and their potential impact on the local economy. Questions were raised about how FFC First could continue to support small businesses amidst these financial uncertainties. The discussion highlighted the importance of maintaining access to capital for entrepreneurs, especially in light of federal budget reductions that could further jeopardize funding sources.

As the meeting progressed, the committee acknowledged the vital role FFC First plays in the community, with 91% of its operations focused within Prince George's County. The organization has facilitated over $164 million in loan approvals, significantly contributing to job creation and the local tax base.

In conclusion, the meeting underscored the urgent need for strategic solutions to bolster FFC First's capacity to support small businesses. As the economic landscape shifts, the committee's commitment to fostering a resilient business environment remains crucial for the county's future prosperity. The discussions set the stage for ongoing collaboration and innovation in addressing the challenges ahead, ensuring that local entrepreneurs continue to thrive.