Perhaps the late nights at the kitchen table with a business plan have finally gone from "some day" to "this could work."
A recent substantial grant to the Small Business Development Center at Central Lakes College in Brainerd may offer the help needed to take the business from hypothetical exercise to a storefront reality or help an existing business expand.
The Minnesota Business Finance Corp. presented a $250,000 grant to the SBDC last week. The grant is expected to boost business growth through U.S. Small Business Administration 504 loans. The loans are low-interest, fixed-rate loans offering smaller down payments than regular commercial loans. The small business center will be able to hire another counselor to help business owners apply for the loans.
Greg Bergman, SBDC regional director, said the Brainerd center has a strong reputation for loan packaging. The grant will allow the center to expand its capabilities in business counseling. The center, which covers an 11-county area, offers assistance in loan packaging and business planning. Those who use the services can keep coming back for follow-up assistance and counseling for the life of their business, including an annual review of financials -- all at no charge. The center is one of nine in the state.
Bergman reported two-thirds of new employers survive at least two years, and about half survive at least four years. Owners of about one-third of the firms that closed said their firm was successful at closure. "Major factors in a firm's remaining open include an ample supply of capital, the fact that a firm is large enough to have employees, the owner's education level and the owner's reason for starting the firm in the first place, such as freedom for family life or wanting to be one's own boss," Bergman reported.
Alexandra Blum, MBFC president and chief executive officer, said the organization wanted to step up their partnership here with the grant -- one of the largest grants they have developed for the north-central Minnesota region. The MBFC has approved loans on projects totaling $183 million to businesses in the region. Blum said those loans helped retain 1,394 jobs that may have been lost to business closures or relocation and created 1,655 new jobs.
The small business center helps people with a business plan and basic marketing ideas, help with financial statement. The counselors assist by asking budding entrepreneurs questions to make sure they have thought through challenges and what it will take in revenues to meet their goals. They help people put together a loan package to help them get started on those goals.
The SBA 504 loans mean manufacturers in the 11-county north-central region may qualify for loans up to $4 million. And other businesses may obtain 504 loans of up to $2 million for commercial real estate or equipment projects.
Blum said the program allows individual banks, which may be small, to compete with larger banks on lending deals.
Bergman said there are a lot of reasons good small businesses cannot get the money they need. And that is where the partnership between Minnesota Business Finance Corp. and the Small Business Development Center may offer assistance.
"That's good for our economy here and it creates jobs and investment," Bergman said.
RENEE RICHARDSON can be reached at firstname.lastname@example.org or 855-5852.
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