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Restructuring

More than 20 years ago, the Florida Legislature set up the Florida Black Business Investment Board (FBBIB) to help African-American businesses with funding and technical assistance. Since then, the board has operated primarily through its lending arm, the Florida Black Business Support Corp., and eight affiliated regional lending organizations called Black Business Investment Corporations (BBICs).

It's hard to call the effort a success. For one, funding has been thin. Through the years, the state has appropriated $9.2 million for the FBBIB's administrative operations, along with $18.6 million for "capitalization" -- basically the loan programs. Only about half of the loan capital went to the eight regional BBICs, which over 20 years amounts to less than $60,000 a year to each. And the BBICs received no funds for administrative expenses.

Gerald Chester, president of the Central Florida Community Development Corp., which manages the East Central BBIC, isn't happy with either the state or the FBBIB. "The amount of resources that the state made available in total to African-American businesses would be appalling to anyone," he says.

The past few years have also been turbulent because of questions about the organization's structure, particularly the relationship between the FBBIB and the local BBICs. A 2003 audit by the Florida Office of the Inspector General found "a breakdown in accountability." Among the numerous findings were that the BBICs hadn't collected, documented, verified or reported reliable performance measurement data. The audit said the performance of the local organizations' loan and loan guarantee portfolios could not be accurately determined. The BBICs disputed the Inspector General's report and have since broken their ties with the FBBIB.

What's ahead for the program? The BBICs received their final payment of $218,000 each, which covered 2002 to 2005, in December and will concentrate on the private sector or local governments for future funding. "It's going OK," says Frances Wimberly, president of the Tampa Bay BBIC, who adds that her organization also has been able to raise funds by charging fees for services.

With less money available for lending, the BBICs will focus on helping prospective and existing business owners with financial literacy, credit training and other technical assistance. That's a positive move, says Jerry Osteryoung, executive director of the Jim Moran Institute for Global Entrepreneurship at Florida State University. He says, "We need to spend more time training people. If you want to make a business a success, throwing money at it won't work if the owner doesn't have the skills to manage it."

On the state level, the Florida Black Business Support Corp. is reinventing itself as the Access Florida Finance Corp. Following the strategy of the U.S. Small Business Administration, it will focus on loan guarantees rather than direct loans. Mark Scovera, interim president, says the state will be able to do more "by leveraging our dollars through loan guarantees and brokering with financial institutions." He adds, "The direct lending will be the exception, not the rule."

Scovera says that while the FBBIB will seek state dollars for administrative operations, the new Access Florida lending program will be a "fee-generated business." He's hoping the focus on loan guarantees to well-qualified clients will change the perception of the black business lending program. "In the past, we've been known as the lender of last resort," says Scovera. "What we want Access Florida to be known as is the place you can get a better deal."