Keeping the Spark alive

By Steve Knight The Herald-Zeitung | ​May 24, 2021 Updated May 24, 2021

NBEDC board members also approved an expenditure recommendation of up to $140,000 that would allow the Spark Small Business Center, also known as Spark, to renew its contract with the University of Texas at San Antonio to operate the Small Business Development Center satellite office in New Braunfels until at least January 2022.

Spark provides free services targeted to existing businesses and aspiring entrepreneurs and focuses on counseling sessions, expanding access to capital, business planning, training, contracting and procurement opportunities and exporting initiatives.

“Since 2011, the EDC has partnered with the Seguin EDC to fund the Small Business Development Center on West San Antonio,” said Jeff Jewell, the city’s economic and community development director. “In late 2020, Seguin left the partnership, and so that shifted the full brunt of the burden for financing the center unto the (New Braunfels) EDC. This funding would renew and provide the funding balance for the rest of the fiscal year as well as the first three months of the 2021-2022 fiscal year.”

The center’s operational expenses total about $17,500 a month, according to Jewell, and Seguin contributed about $17,500 through the end of 2020. 

Historically, Seguin would contribute about $70,000 annually, and NBEDC would contribute $140,000 to the total program costs. 

Although the contract with the center was for $163,460, the additional program costs of about $47,000 paid for the center’s operating costs, including rent, utilities, maintenance and taxes, through the end of the contract period in September. 

Seguin leaving the partnership left the center with an estimated $52,500 shortfall to continue operating through the end of the year. 

The contract and funding allocation periods do not align, according to Jewell. While the contract is signed in October, funding is usually allocated in January or February, which leaves a three-month gap between when funding is available and the contract is signed. Spark needs to provide a 90-day termination notice in its lease and can either continue operating for that period or pay out its lease obligations for the 90 days if an annual contract with the Small Business Development Center is not signed. The decision had historically been made to fund the center for a 90-day period before ceasing operations and the funding and contracting cycle mismatch allows this to occur if necessary.

During most of 2020, the center assisted local businesses with the Paycheck Protection Program, Economic Injury Disaster Loans, disaster recovery and assistance from Federal Emergency Management Agency and Small Business Administration resources due to damages from the winter storm in February, as well as with access to additional grants and loans for particular sectors of the population to include veterans, women and minority-owned businesses. 

Between April 2020 and March 2021, the center facilitated nearly $1.6 million in loans and retained 36 jobs. In addition, the center provided about 1,800 counseling hours, with 139 of these hours provided to new clients. They also provide ongoing counseling to existing clients that have utilized center services in the past.