Small businesses get help from EDD

Posted: Thursday, August 19, 2004

Small business owners in need of a little extra cash especially those who may have trouble qualifying to borrow through traditional lenders may want to apply to a program offering small loans to small businesses on the Kenai Peninsula.

The program, offered through the Kenai Peninsula Economic Development District, makes micro-loans of up to $5,000 to small business owners, many of whom are artists who sell their crafts. The money can be used to buy whatever is needed to improve business.

"We can lend people a little money to get a new piece of equipment or new studio or whatever they need to increase their production," said director John Parker.

According to Parker, the micro-loans involve less paper work than loans for larger amounts, and the terms and conditions can be customized, to some degree, to the needs of the individual borrower. He said the loans may be of particular interest to individuals who have trouble securing a loan through traditional sources, due to credit or other problems.

"We're really pretty flexible," he said. "It's not like a bank."

One option is to use an individual's Alaska Permanent Fund dividend to pay back the loan. Up to $700 may be borrowed using the dividend as collateral, according to Dee Gaddis, the loan program's administrator.

The program is open to owners of small businesses of all kinds. One recent borrower, Morgan Evans, used loan money to buy digital camera and editing equipment.

Morgan is a freelance cinematographer based in Sterling. He's done work for the Discovery Channel, PBS and network television. Regardless of past experience, he said a freelancer needs the right equipment.

"If I go to PBS, they actually ask me what equipment I'm using," he said.

The new digital equipment brought his gear up to current standards and allowed him to continue to get work.

"If it weren't for the fact I'd upgraded my equipment, I'd probably be turned down on some of the work I get," he said.

The micro-loan program recently was awarded a federal grant which significantly increased the program's funds. The $42,731 grant, awarded through the USDA Rural Development, has been added to the funds available for loan through the program. Historically, the program only has had about $10,000 available for loan.

In the past, micro-loan money has run out quickly, before all those who applied could be served. The increase in funds means more small business owners will be able to benefit from the program.

"We have had to turn folks with good ideas away due to lack of funding," Parker said. "This grant is going to allow us to do quite a bit more under this program."

For more information about the program, call the Kenai Peninsula Small Business Development Center at 262-7479.

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