Steamboat Chamber to pursue revolving loan fund for area businesses

Advertisement

— The Steamboat Springs Chamber Resort Association is starting initial discussions about starting a revolving loan fund for area businesses.

Chamber CEO Tom Kern said Wednesday that he and the Chamber’s economic development director, Jane Blackstone, have received feedback from Routt County businesses in the outdoor manufacturing industry that have had challenges in getting financing through traditional sources.

Access to capital is the biggest challenge to businesses that still are new but growing fast, Kern said.

“They’re not start-ups, but they’re not mature,” he said. “They’re in between, and they’re growing very fast.”

Kern said that he’s talked to a few local bank leaders and that the feedback has been positive.

“The next step is to sit down with them collectively,” Kern said.

There are a several models used by other communities for revolving loan funds, Kern said, but they typically have underwriting requirements that are a little less stringent and maybe lower interest rates than other capital sources.

If a number of banks agree to participate in a fund, he said, the risk of lending to a new business is a little more spread out.

Kern said there are a number of other programs that can provide assistance to Routt County businesses that need capital, but there may be enough demand locally to create a new fund for the area.

Randy Rudasics, of the Yampa Valley Entrepreneurship Center, said there are three effective microlenders that area business can turn to for capital: Accion, Colorado Enterprise Fund and the Northwest Loan Fund from the Northwest Colorado Council of Governments.

All three are not-for-profit and eager and willing to lend to small businesses, Rudasics said.

They don’t have the same regulatory requirements as community banks, he said, and are willing to amounts as small as several thousand dollars.

Interest rates tend to be a little bit higher than Small Business Administration loans through local banks, and they still require collateral, a business plan and a respectable credit history, Rudasics said.

The microlenders are targeted more toward start-ups, he said, and Small Business Administration loans are a great option for many people and can including revolving credit.

The process to get a Small Business Administration loan starts with a local bank — most of which in Steamboat participate in the program — and those with existing businesses should start by working with a local lender, Rudasics said.

Kern said the discussion about a local revolving loan fund still is preliminary but that the Chamber plans to take the next step and have a meeting to talk about the potential.

Who would administer the fund or what the Chamber’s eventual involvement would be are yet to be determined.

There are a number of other chambers of commerce that operate economic development councils, he said, which in turn operate revolving loan funds.

To reach Michael Schrantz, call 970-871-4206, email mschrantz@SteamboatToday.com or follow him on Twitter @MLSchrantz

Join the Yampa Valley VIP email club

Yampa Valley VIP

Comments

Use the comment form below to begin a discussion about this content.

Requires free registration

Posting comments requires a free account and verification.