Friday Jan 30 2009
Loans offered to build existing businesses, establish new ones
By: Gloria Young, Journal Staff Writer
There are loans available for startups and established businesses that can generate jobs. That’s the message from the Sierra Economic Development Corporation — known as SED-Corp — and City of Auburn officials. SEDCorp partners with Auburn in administering the city’s Com-munity Develop-ment Block Grant program. “SEDCorp has the experience in underwriting and how to work through the state process,” Wil Wong, community development director, said Wednesday. Last year the city received $500,000 from the CDBG program — federal funds administered through the state for business loans, he said. There are actually two pots of money, he explained. There’s also an existing-loan repayment fund that can be used to make new loans. Mike Holmes, Auburn mayor, says part of the challenge has been getting the word out about the loan opportunities. “We have outstanding loans that are in the $100,000 range,” he said. “If we can encourage an entrepreneur to start a new business within the city, hopefully a business that would generate sales tax and create new jobs, we’ll take a very serious look at their background and business plan and see if we can help.” In addition to its partnership with Auburn, SEDCorp offers a variety of other business loan programs, training and technical assistance. “Part of our job and our reason for being here is to provide loans for some who can’t get loans from somewhere else,” CEO Brent Smith said. “That doesn’t mean bad loans. They must be credit worthy.” Prospective borrowers need a good credit history, business plan and a market analysis. Choices include micro loans — in the $5,000 to $35,000 range — and larger amounts. SEDCorp can lend up to $150,000 and has contacts including venture capitalists that can provide millions if the business warrants, Smith said. Only fixed-rate loans are available. And the loans are collateralized. “We’ve used some interesting security over the years,” Smith said. That has included a dump truck, classic automobile and a Harley Davidson motorcycle. Loan supervisor Jerry Huynh coordinates the programs. “He’s tasked with expanding the number of loan programs we provide, expanding word of them and doing more partnerships with banks,” Smith said. Huynh also is the point person for the city of Auburn’s CDBG program. The loans can be for real estate purchases, tenant improvements, equipment and working capital, Smith said. SEDCorp also has a special program for broadband Internet service providers. Operations Manager Sandra Sindt oversees the training side, coordinating courses in Internet marketing, QuickBooks and other topics. Currently she’s working on a business boot camp to be held in late February in Susanville, with others likely to follow in Plumas, Sierra and Nevada counties, and eventually in Placer and El Dorado counties. The intense three 12-hour days will cover business law, financial statements, Quickbooks, Web site development, marketing, marketing analysis and business analysis. Attendees are required to provide a $50 deposit that is returned after successful completion of the course. “We want people who attend to be serious about being there,” Smith said. “Business is serious. Business is a battlefield, so prepare for battle.” The Journal’s Gloria Young can be reached at gloriay@goldcountrymedia. com or comment at Auburnjournal.com.