JCIDA not getting loan applications

Having too much money in the bank is the kind of problem most agencies would like to have.

For the Jefferson County Industrial Development Agency, though, a large bank account is simply a sign that not enough people have been applying to the agency's microenterprise fund.

On Thursday, JCIDA interim Director Donald C. Alexander told board members that the agency needed to find more budding entrepreneurs to take out loans.

"We're not getting as much lending out," he said. "Good projects are welcome here."

JCIDA has 18 microenterprise loans outstanding, for a total commitment of $590,000, with most businesses at the $40,000 loan limit.

Mr. Alexander said the agency has an additional pool of $365,000 available to lend to small and new businesses.

"I'd like to see that it gets put into the community where it finds some return," he said.

Mr. Alexander could not pinpoint why demand for loans had slowed, except to say that the microenterprise fund may have slipped out of the public eye.

"I don't think it relates to anything specific. There's not a lack of ideas or an economic condition," he said. "Sometimes we need to make sure people know that these types of programs are available."

The microenterprise fund is limited to businesses with five or fewer employees who can apply to the program for funding to buy machinery and equipment, create working capital or perform renovations.

The maximum loan is 40 percent of the total project cost, up to $40,000, with interest rates ranging from prime minus 3 percent to prime plus 2 percent. The maximum loan term is 12 years and the loans require equity participation of at least 10 percent of total project costs.

Genevieve H. Chavoustie, owner of Taste of Design, Cape Vincent, obtained a $40,000 loan two years ago to renovate the exterior of her business.

She said that working with JCIDA was much easier than applying for a larger loan with a bank. The agency was flexible and offered a lower interest rate than other potential financial sources, she said.

"We had a really good experience," Mrs. Chavoustie said. "We really felt that they were there to help your business."

Before business owners apply for a microenterprise loan, the JCIDA recommends that potential applicants like Mrs. Chavoustie attend a seven-week series of classes at the Small Business Development Center at Jefferson Community College.

The center offers the business series once every quarter for a $165 fee, SBDC Director F. Eric Constance said.

While the average class size is 15 to 20, the most recent program, which started Thursday, had 10 people attending it, he said.

"It's the first time we've had a class this low," he said. "We don't know exactly why. It could be time of year, the way it was advertised, the economy."

Mr. Constance said class participants learn about business and financial plans and are taught by experts in insurance, banking and accounting. When they are ready for the next step, potential business owners are directed to microenterprise loans offered by agencies such as JCIDA, Jefferson County Chamber of Commerce, Sackets Harbor Economic Development Agency and Snow Belt Housing Inc., Mr. Constance said.

"We think it's important that we keep them attuned to who's lending out there, what kind of inventories of money they have available, and of that nature," he said. "We don't want to send them to an agency that's not lending. That just frustrates people."