Building a One-Stop for Economic Development and Education

People are noticing a campus of the University of Texas at Brownsville for its flexibility.
By Kevin Knoch

Why would a financial services company headquartered in New York City have an interest in locating to Mexico Boulevard in Brownsville, Texas? And not just a branch office, mind you, but a serious commitment at relocating three affiliated companies, with a target of hiring 500 employees over five years.

Plans at Newtek Business Services, Inc. call for exactly that.

Founded in 1998, Newtek Business Services offers several services aimed at the small business market. On the business assistance level, services include business lending, electronic payment processing, insurance sales, payroll services, and digital bookkeeping. Internet products comprise web hosting, development and design. And Information services include data backup, storage and retrieval.

Newtek has taken aim at small and medium-sized companies. Chairman Barry Sloane said that the company is using the Small Business Administration’s model to set the parameters of its customer market. “We are using a similar definition the SBA uses; up to $20 million in sales and up to 500 employees,” he says. Companies meeting those criteria represent nearly nine out of 10 businesses in the country and just over 50 percent of the gross domestic product.

Newtek began providing financial services to a market that was considered under-served. The company today provides essential tools and access to technological resources for its 80,000 customers through a network of subsidiaries that are available in all 50 states.

According to Executive Vice President Joseph Carvalho of Fortress Data Management, LLC, “We were looking at the state of Texas and a number of people suggested we consider a border town because we could have a positive economic impact.” In addition to Fortress, two other companies now established in Brownsville that Newtek owns are Business Connect, LLC and Summit Systems and Design, LLC. The companies will be providing Newtek with products and services to assist all its U.S. clients.

Newtek’s new Texas address, 301 Mexico Boulevard, is distinctive in Brownsville as the address at which The University of Texas Brownsville/Texas Southmost College (UTB/TSC) has established an International Technology Education Commerce Campus (ITECC) in a 647,000-square foot center, formerly a shopping mall.

One of the services available at ITECC caught Newtek’s eye; an International Innovation Center (IIC) with a business incubator that allows start-up businesses to gain a foothold in an atmosphere where counseling and business services are available. Tenants pay discounted rents that climb the longer they stay in the incubator.

Director of Incubator Services John Sossi says the incubator has helped nearly 50 businesses get started. However, not all new enterprises which apply go into the incubator; nearly 70 have decided to go elsewhere, or realized it may not be a good idea to even open their doors.
Sossi explained, “Newtek came into the incubator with three new start-up companies. We understand Newtek heard from someone who came through here and liked the concept; it was through word of mouth.”

Carvalho added, “The ITECC was one of the main drivers for us in considering Brownsville because we are physically located on a college campus.”

...See magazine for remainder of story.