MicroLoan program provides money for small business
A new loan program will provide seed money for Marion County small businesses to start-up or expand.
The Marion County MicroLoan program has $90,000 to loan to small businesses in the county, Troy Leith told members Friday at the monthly meeting of the Marion Chamber of Commerce.
Communities participating are Burns, Durham, Florence, Goessel, Hillsboro, Lehigh, Lincolnville, Lost Springs, Marion, Peabody, Ramona, and Tampa. Every Marion County community participates in the local microloan program, and is a member of the Marion County Economic Development Council, Leith said.
He noted program administrators want to loan the money out because at the end of two years any money not loaned out is taken back.
The microloans are designed to help small business owners by providing loans and technical assistance to help ensure success over time.
"Last week, we made our first loan," Leith said. "What we need to do as a community is promote the project and get the word out there."
Leith said the program could help out individuals who banks and other traditional financing sources might consider a high risk. The program offers up to a $15,000 loan for an existing or start-up business; no limit on total project debt; and other funds are available through companion programs.
Any type of "for profit" small business is eligible including woman-owned businesses, minority-owned businesses, and low-to-moderate income earners. The loan term is one to 15 years, depending on use of funds. "They want 51 percent of jobs created to be for low-to-moderate income people," Leith said. The maximum number of employees is five, including the owner.
Funds can be used for inventory, equipment, working capital, leasehold improvements, real estate construction, and real estate purchase.
Loan money cannot be used to refinance debt, and prior program borrowers are ineligible.
The interest rate is set at six percent. Collateral can be anything the business is buying, Leith said. Technical assistance also is provided to business owners in the program, through efforts of the Marion County Economic Development Council and South Central Kansas Economic Development District (SCKEDD).
The assistance can include accounting setup, software, payroll and help with monthly statements, marketing, brochure design, advertising design and consultation, employee issues, and inventory control.
Susan Cooper, Marion economic development director, said the county microloan program will provide seed money to establish a revolving loan program.
"Over time, that could be a nice fund to draw from," Cooper said.
Leith agreed, "When it all comes back in, the county will have $90,000 plus interest money to loan out again."
For more information about the Marion County MicroLoan program contact the following:
Carolyn Koehn, City of Burns; Sarah Cope, City of Florence; Richard Drake, Citizens State Bank, Goessel; Hillsboro Development Corp., Hillsboro; Dave Schneider, City of Lincolnville; Cooper with the City of Marion, JoAnna Brazil, Peabody Main Street Program; and Jim Clemmer, City of Tampa.
