Downtown Vision seeks to maintain business loan program

12/1/2012

New partnerships sought to fund IWW.

New partnerships sought to fund IWW.

BY SCOTT AUST

saust@gctelegram.com

After the Kansas Department of Commerce announced in September it was ending the 27-year-old Main Street program, local Main Street organizations like Garden City's Downtown Vision began looking for opportunities to form a new state organization and to also find new partnerships that would allow it to keep programs like Incentives Without Walls operational.

"One of our big concerns is we need fresh money coming in yearly to the IWW. Otherwise, we have to wait until people pay off their loans ... to loan it back out again and that can be a really long process," Beverly Schmitz Glass, Downtown Vision executive director, said.

Glass said NetWork Kansas, a statewide organization that helps small businesses find partnerships and business-related resources, has proposed creating a partnership with remnants of the old Main Street organization that would make more money available for IWW programs and provide quarterly education and training opportunities.

Incentives Without Walls is a zero-interest matching loan program that businesses can tap into for up to $20,000. Locally, the program has provided 28 loans worth $181,266 since 2004, which has been matched by $920,705 in private funds for improving facades, signage, computer and equipment purchases and renovations.

Glass said IWW is most often used to fill a gap in funding. For example, say a business owner wants to put a new facade on a building that costs a total of $10,000. The owner has $3,000 available, their bank agrees to loan $5,000 but they need another $2,000 to fill the gap.

The average IWW loan is about $10,000, Glass said. Downtown Vision provides a 1-to-1 match up to $2,000. Loans over $2,000 require business owners to provide $3 for every $1 from the IWW program. In other words, for a project to qualify for the full $20,000 available through IWW, the total project would cost $80,000.

"We can lend up to $20,000 but of course you have to have $20,000 in the bank to lend out," Glass said. "That's been my concern. If we have people making payments of $250 a month it's going to take a while to get up to where we can lend money out because we have no new money coming in."

Operational since 2006, NetWork Kansas connects entrepreneurs and small business owners with other business partners throughout the state. According to its website, it promotes an entrepreneurial environment by creating partnerships and connects businesses to a network of business building resource organizations in the state.

Program directors from Garden City, Peabody, Emporia, Holton, Belleville, Winfield, Hutchinson and Coffeyville have been talking the last couple of months about trying to form a new state organization. Glass said sometime in January they should have a general outline and plan to send it to the rest of the Main Street programs, and that in essence would be the new state organization. In February, she expects there will be a vote on the NetWork Kansas proposal.

Glass said NetWork Kansas' proposal would add additional matching funds for the IWW zero-interest loan program that Downtown Vision likely could apply for every six months.

"You apply for all you need and you may get all of it or you may get a portion depending on how many apply," she said.

Glass said IWW loans have been used locally to help buy buildings and new equipment, start new businesses and purchase computers and software or bring a new product line to a business.

Doug Harder, co-owner of Patrick Dugan's Coffee House, said his business was able to borrow about $13,000 to purchase equipment and signage. He has high praise for the IWW program.

"It was crucial to having us get the coffee shop open," he said. "It would not have happened without it."

Harder said the underwriting process was diligent but had good terms. But the biggest benefit was having an entity willing to provide a loan for the project.

"A lot of times a business our size in food service is not going to get a conventional loan anywhere. Financial options for little businesses are becoming zero," he said. "So programs like this are super crucial."

Harder said the IWW loan will be paid off by the end of the month and then it can be recycled through a loan to another business downtown.

"I can't say enough about the program. We need lots of those types of things in the state," he said.

Michelle Mayo, co-owner of The Corner on Main, said using IWW made it easier to finance the store's awning project several years ago.

"We did a little black-and-white-striped valance that is hanging on the front of our store that was hanging on our old store previously a block south and luckily it fit right on the new location," she said.

Glass said the local IWW program is in great shape.

"If we can help them get better or more efficient then that's what these loans are for," she said.

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