BIZTIPS - March 23, 2008

Biz Tips: Available Business Capital is Growing This Spring

Sunday, March 23, 2008

Springtime is a beautiful thing. Those of us who've been deeply focused on college basketball or tax preparation might not have noticed, but we've been getting plenty of moisture this year for another bumper crop of ag products. With wheat prices where they are, the benefits will continue to ripple through Oregon's rural economy.

But there's another nourishing Springtime phenomenon that may be less well known because it doesn't drench your coat or cause river flooding. That's the regional abundance of capital for business growth.

How can this be, with all the news about banks tightening credit in the backwash of the mortgage mess? Here are four regional examples.

First, the highlight of the Greater Eastern Oregon Development Corporation (GEODC) Board meeting on Friday was the upbeat news that their business expansion loans are being repaid at record rates, there have been only two write-offs in over 18 months, and money is available through their loan programs. Their lending territory covers Gilliam, Grant, Harney, Malheur, Morrow, Umatilla, and Wheeler counties. Every county in Oregon is now served by a Federally funded (Economic Development Administration) development corporation like GEODC.

Second, the steering committee for Pub Talk events in Hermiston, Pendleton, and Milton-Freewater met on Thursday to plan the next series of investor / small business gatherings in May. Pub Talks have been around for over a decade, but they're now generating deals between private "angel" investors and small business owners outside the I-5 corridor, from Hood River to Ontario.

Third, the Oregon Growth Account, responsible for investing a portion of lottery money in growing Oregon businesses, has attracted large angel investor groups outside Oregon to put money into Oregon companies.

Finally, the new revolving business loan funds of the cities of Hermiston, Milton-Freewater, and Pendleton are about to be launched. At around $750,000 each, this is new Federal and local capital for lending and re-lending to businesses in the region.

How do you access some of this capital successfully for your business?

First, you need a plan. Know the capital needs of your business. When you go to lenders or investors, they expect well-developed projections of costs and resulting revenues. If you're shooting from the hip or it's all in your head, they're going to send you back to do your homework. You'll probably wind up at a Small Business Development Center, so you might as well start there and build your plan with experienced guidance.

Second, you have to be credit-worthy. The whole picture counts - your personal and business credit history, your plan for loan re-payment based on your overall business growth plan, and your past record of success.

Third, this is not free money, it's responsible investment in solid growth. The goals include increasing sales, creating new jobs, and being able to repay through business expansion. One business repaid GEODC at $1,000 per month MORE than the required loan payment.

Fourth, banks are still the primary source of business loans. Once an SBDC counselor helps a business "package" a loan application with all the required records, projections, and written plan, the financial institution determines lending limits, suggests partner funding from sources like GEODC, and helps chart a course for future investment as the business grows.

So when you go out to look at Spring flowers, take a closer look at another growing resource - business capital in our region. Look for ways to make your business grow. If we get it right, we'll have a bumper crop of jobs and sales to harvest right along with that wonderful winter wheat.

 



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