As a result of flooding earlier this year, a new fund is being set up in the area for business development.
MIDAS Council of Governments Executive Director Chris Weldon informed the Humboldt County Board of Supervisors about the new fund at Monday's meeting.
Congress has released additional funding as the result of the flooding, and MIDAS has been asked by the Economic Development Administration to submit an application for a new revolving loan fund, Weldon said.
"There is money available to establish a new business revolving loan fund" in the amount of $250,000, Weldon said. However there must be at least 10 percent in matching funds, so Weldon is asking for $5,000 from each of the six counties in the MIDAS region.
"All of the counties I have been to have been very receptive to this," Weldon said. Hamilton, Pocahontas and Webster counties have already agreed to $5,000 commitments. If all six counties approve there would be $30,000 in matching funds, which would increase the total fund to $280,000.
Like the existing fund, only projects that are 85 percent to 90 percent complete would be considered. Businesses can request up to 10 years to pay back the loan.
"We try to be 1 (percent) to 2 percent below the prime rate on our rates," Weldon said.
Businesses do not have to have been affected by the flooding to receive the new loans. If approved, the new fund could be established by November, Weldon said. Right now there are no requests waiting for the new loans.
The existing $280,000 revolving loan fund is 96 percent loaned out.
"It has rolled over three times since we had it in 10 years," Weldon said. A total of 16 area businesses have borrowed from the loan, and 10 of those loans are still active.
"To me that shows a pretty good need for a revolving loan fund for businesses," Weldon said.
A similar fund for housing is 98 percent loaned out, with Humboldt being a major borrower, Weldon said.
Supervisor Harley Hett asked how business owners would learn of the new fund. Weldon said information is being published in the MIDAS newsletter, through area economic development officials, and in brochures to be distributed in banks and businesses.
The board approved the $5,000 request
Source: http://www.messengernews.net/