• November 21, 2014

Cove EDC mulls ‘micro’ loans

Program would help small businesses

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Posted: Friday, May 3, 2013 4:30 am | Updated: 11:54 am, Wed Jul 16, 2014.

The Copperas Cove Economic Development Corporation’s board is investigating the creation of a small revolving loan program for local businesses.

“This is something we would like to incorporate into next year’s budget,” said Polo Enriquez, executive director of the board.

Enriquez on Tuesday pitched the idea of using an estimated $100,000 to fund several loans from $5,000 to $25,000 for businesses that might not be able to obtain a “micro” loan through banks because they are too small.

The money could help local business owners expand shops, make renovations or even purchase their own buildings, said Rosa Rios-Valdez, chief executive officer of Business Community Lenders. She was present to start the discussion of managing such an operation.

“This is a micro, this is a small revolving loan fund in your community,” Rios-Valdez said.

Business Community Lenders is an Austin-based nonprofit that manages a similar style of loans for cities and other economic development boards statewide.

“The way that we do it is that we are your back office,” Rios-Valdez said. “A lot of EDCs don’t have a lending office, but we do.”

Rios-Valdez said the board would create its loan policies if it decided to move forward with hiring the nonprofit company, which suggested a $500 monthly fee for managing the loans.

“Ultimately, it is your program,” she said. “You roll it out.”

BCL provides all the preliminary and post services after the revolving loans are awarded by the board or entity the board creates.

Having worked with multiple economic development corporations, BCL knows it is the board’s goal to create jobs and stimulate economic growth, Rios-Valdez said. In the case of EDCs, it likes to recommend that lending policies tie an amount of money to some form of employee retention or growth.

She also said most of the loans are not unforgivable and draw some sort of low interest rate, which acts as an incentive to local business owners.

BCL operates about $300 million in loans for cities and EDCs, Rios-Valdez said. Of the micro loans the nonprofit operates, none of those borrowers were delinquent.

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