Lead Bank was selected by Edgemoor Infrastructure & Real Estate LLC to finance “diverse and disadvantaged local businesses working on the $1 billion single-terminal modernization project at Kansas City International Airport (Code: MCI).” The bank achieved the appointment based on its history of working with small businesses in Kansas City that need short term lending.
According to Biz Journals, Kansas City requires that its International Airport “project achieve a 35 percent disadvantaged business participation goal, which includes 20 percent participation by Minority Business Enterprises (MBEs) and 15 percent participation by Women Business Enterprises (WBEs).” In addition to MBE and WBE spend, the project will also look to promote Disadvantaged Business Enterprises (DBEs), including organizations like veteran-owned businesses.
While the “Edgemoor team already has a nearly complete roster of 21 MBE and WBE companies providing professional services”, they are still looking for additional companies that can provide construction services. The reason it has taken the team a bit longer to find construction companies for the project is due to cash flow issues that plague smaller firms on long term projects such as this. Businesses need to pay employees for services on a continuing basis, but may not get paid by their customer for up to 2 months.
This is where Lead Bank comes in for assistance.
“Both of these programs work in tandem,” Lead Bank President Greg Bynum said. “A contractor gains a contract from Edgemoor, maybe a $200,000 contract for flooring. They need to buy materials and pay their labor before they get paid. So they come to us and we’ll loan somewhere from $150,000 to $160,000 on a line of credit. Then they can order the materials and on a weekly basis advance on the line of credit to pay their labor. When the job is done they’ll apply for payment from Edgemoor under ‘pay without delay.’ We’ll fund Edgemoor some money they’ll use to pay off the contractor, then when Edgemoor gets paid by the city, they pay us back.”
Creating creative solutions for smaller firms is a key offering of Lead Bank and one that is helping provide support to the MBEs and WBEs seeking to win a bid for the upcoming Kansas City International Airport.