Development group: It has funds to loan
FAIRMONT — The start of a new year inspires hope for improvement and growth, and maybe a new venture like expanding or establishing a business.
You need money to accomplish that goal, though, and the Fairmont Economic Development Authority can help.
“We can fill the financing gap,” said Linsey Preuss, Fairmont economic development coordinator. “We have a revolving loan fund program that can assist existing businesses or those interested in starting a business with a loan of one-third of the total project cost up to $75,000.”
Because FEDA does not want to compete with local financial institutions, preferring to partner with them, applicants will need initial funding through a bank.
“The banks love to partner with us because it makes their loan less risky,” Preuss said.
FEDA takes a second mortgage or security on whatever is used for collateral so the lender gets paid first.
Money from the FEDA revolving loan fund can be used for building acquisition, expansion, machinery and equipment, inventory and real property acquisition but rarely can it be used for working capital because of the difficulty in providing collateral.
FEDA has the adaptability to make repayment as unchallenging as possible for the borrower.
“If we use real estate as collateral, we can amortize the loan for 20 years. If we use anything else, we can amortize over 10 years. That means we’ll make the payments as low as possible so it’s easier for the borrower,” Preuss said. “We have the ability to be pretty flexible so if their cash flow looks like they need some time to get some income back in, we can have the payments start in three months so they have that time where they’re not making payments. It allows them to get some income and get back on the ground.”
Money for the revolving loan fund originally came from a federal economic development grant the city received after the closing of Armour Foods in 1987 in an effort to create new employment opportunities and businesses to help more than 500 people who lost their jobs when the plant shuttered its doors. The money advanced then and over the past 30-plus years has been paid back or is in the process of being repaid. Recent examples of revolving loan projects include new businesses such as Butcher Block and Graffiti Corner or for equipment upgrades like the Bowlmor.
“Right now we have about $900,000 lent out, and we have about $700,000 to lend out, just sitting there, waiting,” Preuss said.
She calls the four-page application form “super easy” with the loan process similar to a bank’s method of checking credit reports and personal and business finances.
The idea of starting or expanding a business can be overwhelming, but Preuss is quick to offer her expertise and assistance.
“Call me. There are a lot of resources in this office,” she said. “I can walk you through all the points that you need. I can hook you up with the Small Business Development Center to help with writing a business plan or work through financial projections.”
Another advantage to a FEDA revolving loan is that the decision is made by locally by members of the Fairmont Economic Development Authority: Amy Long, Andy Noll, Richie Johnson, Mike Wubbena and Fairmont City Council representatives, Bruce Peters and Tom Hawkins, who are voting members of the board.
“If you’re thinking about doing a project, call me. I will hook you up,” Preuss said.
Her direct line at City Hall is (507) 238-3925.