On March 11, the Bellingham Whatcom Economic Development Council will partner with the Port of Bellingham to host the Second Annual Alternative Financing Seminar. The BWEDC and several other presenters will offer detailed explanations of lending programs designed to grow local businesses, create new jobs and expand economic opportunity throughout Whatcom County.
Small-to mid-size companies can find it difficult to tap into traditional sources of capital, even in good times. Alternative funding, whether through the port’s Industrial Revenue Bonds, the EDC’s Revolving Loan Fund, or other programs, can augment and, in some instances, replace bank financing.
“This event is entirely about sources of funding and how to access them,” says BWEDC Program Manager John Michener. “We want the business community to know what’s available to them, including our own loan program.”
The BWEDC Revolving Loan Fund (RLF) was established more than 20 years ago through a grant from the federal Economic Development Administration. The funding is intended to support the region’s Comprehensive Economic Development Strategies (CEDS) program, through loans to existing county businesses. The BWEDC fund is particularly targeted toward the manufacturing sector because of the diverse employment base the sector generates, but any private, for-profit concern will be considered.
“The RLF is really about jobs,” Michener says. “We’re working to keep this money out there, supporting the kinds of businesses the community has said it wants to see.”
Michener says that loans are typically made in amounts ranging from $30,000 to $75,000. Below-market, fixed interest rates are standard, and funds may be used for fixed assets such as equipment and real estate and/or working capital. All loans must be approved by the RLF Committee, which represents a cross-section of community businesses, lenders, minorities and elected officials.
Among the top criteria the committee considers is whether the loan is likely to generate new jobs for Whatcom County residents at a rate of one job for every $20,000 loaned. The committee also looks at whether the applicant’s business will significantly improve the tax base and serve as an asset to the community through relationships with other businesses and diversification of the employment base.
“In a perfect world this region knows who it is and what it wants in terms of business development,” Michener says. “The better we can answer those questions, the more useful this fund becomes.”
For Lynden-based Parts Warehouse, an RLF loan taken last year has helped support a significant growth spurt. The company, which sells, assembles and manufactures dental equipment, needed an infusion of working capital as it replaced one of its largest vendors with more in-house production and alternative suppliers, says company Secretary-Treasurer Cindy Heins. Parts Warehouse learned about the fund from the Small Business Development Center and with help from the company’s banker, Jeff Jansen, at Horizon Bank, applied to the RLF Committee.
“It’s easier to get a loan for something tangible like a truck,” Heins says. “We were looking for additional funding to help us work better, bring in new people and become more profitable.”
Heins says the funding came at a good time, and the process was surprisingly simple.
“I was shocked at how quickly [the EDC] reacted to our need,” she recalls. “They were very supportive, easy to work with and seemed excited to see a local business grow. It’s nice to see that resources like this are out there.”
The RLF is one of several non-traditional lenders working with county businesses. At the Alternative Financing Seminar on March 11, the Port of Bellingham, Bellingham Angel Group, Northwest Business Development Association (SBA Loan Packager) and other invited presenters will also be on hand to give details of their lending programs, answer questions and provide guidelines and applications. The idea, says Michener, is to give businesses tools they can use right now.
“Last year we invited bankers to this seminar to give them information they could pass along to their clients,” says Michener. “This year, especially given the current economic situation, we thought it best to offer the information directly to the public.”
To learn more about the BWEDC’s Revolving Loan Fund and the Alternative Financing Seminar on March 11, please visit www.bwedc.org or call 360-676-4255. Event sponsorship opportunities are available.
2nd Annual Alternative Financing Seminar
- Date: March 11, 2009.
- Location: Bellingham Cruise terminal.
- Time: 10 a.m. to 1 p.m.
- Cost: free. Register online at www.bwedc.org.
Brought to you by the Bellingham Whatcom Economic Development Council and the Port of Bellingham.