Havre Daily News - News you can use

By Tim Leeds 

Millions available in low-interest business loans in statewide program

 


The local economic development agency is aggressively looking for applications for a new program that offers millions of dollars in low-interest loans to Montana businesses including agricultural operations.

"It's on a first-come, first-serve basis, and that's why, obviously, we're interested in using its program as aggressively as we can, " Bear Paw Development Corp. Executive Director Paul Tuss said this morning.

Tuss said money coming through the state-administered federal State Small Business Credit Initiative will be loaned out from and paid back to Bear Paw as part of its revolving loan fund, to be loaned out again in future years.

"That's what's so nice about this, is its not a one-time deal, " Tuss said.

"It's a great opportunity for businesses to do something positive for their operation at low-interest rates, " he added.

The money in the program — Montana is eligible for more than $13 million — was set up through the Small Business Jobs Act of 2010. The Montana Board of Investments, the state Office of Economic Development and state Department of Commerce will work with nine community development organizations and revolving loan funds including Bear Paw to identify projects and help complete applications to fund them.

The state has entered an agreement with the Treasury Department to make a 10-1 match on the money coming from the federal government in the program.

"This puts more than $100 million on Montana Main Streets through our small businesses, " Gov. Brian Schweitzer said in a press release. "That is good news for our Montana economy and small businesses.

Montana now has received its first allocation of the money, $3.4 million.

The program is intended to leverage money from the private sector. Bear Paw Development Director of Loan Services Christin Hileman said a typical loan will be half through the new program, abbreviated SSBCI by those in the field, and half through bank loans at their existing rates.

The SSBCI rates, set based on the state Board of Investment rates, are adjusted each week, and people can call Bear Paw at 265-9226 to find the current rates. Hileman said the SSBCI rates for a five-year loan now are below 1 percent.

"When you say low, it's really low, " she added.

The loans can be for a period ranging from five years to 20 years. Hileman said the rates now on a 20-year loan would be 4.5 percent.

She said if banks are not willing to finance the other half of a business loan, Bear Paw can apply to see if the other half also can be made through SSBCI funds.

The loans can be for most any capital-related business investment. Business owners could use the money to buy or expand an existing business, or to start a new business. Agriculture producers could use the funds to buy property or to buy equipment, such as new tractors, combines, headers and so on.

Hileman said the rates also are fixed for the life of the loan.

"Interest rates are currently at all-time lows, " she said. "When rates eventually go up, SSBCI borrowers will continue to benefit from the low rates they locked in today. "

The program has a maximum loan amount of $1 million — Hileman said the administrators wanted to limit the size to try to approve a larger number of smaller loans, rather than a few multi-million dollar loans — and has no minimum amount.

Tuss said a key to the program is applications will be reviewed on the local level, by Bear Paw's revolving loan committee, and can be adjusted or changed before they go the state level for the review by the state agencies.

Because the loans will be made on a first-come, first-serve basis, it will not be a competitive application.

"Each loan will be reviewed on its own merit, " Tuss said.

Hileman said it's important for entrepreneurs to move quickly on the opportunity.

"Once this money is gone, it's gone, so we want as many of our local businesses to apply for this as possible, " she said. "We would like to see as much as we can in the Bear Paw district and surrounding regions. "

 

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