Local Politics

Small businesses praise state loan initiative

Posted April 14, 2009

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— State officials said Tuesday that they want the state budget to include a fund to give low-interest loans to small businesses struggling to raise capital during the economic and credit crisis.

Lt. gov.: Small businesses face 'economic disaster' Lt. gov.: Small businesses face 'economic disaster'

The Small Business Assistance Fund received $3 million in the budget passed by the Senate last week. Golden LEAF, a foundation that directs money from the national tobacco litigation settlement to economic development projects, also plans to invest $5 million in the revolving loan fund.

Lt. Gov. Walter Dalton, who conceived of the idea, compared it to state disaster-loan programs administered by the Small Business & Technology Development Center.

"This is not a natural disaster; it is an economic disaster," Dalton said. "In natural disasters like (Hurricane) Floyd and the floods in the mountains, we put out money to help small businesses to get back on their feet."

Businesses with fewer than 100 employees or annual revenue of less than $1 million could use the loans to guarantee commercial loans, as emergency bridge loans or for other purposes to preserve jobs. Since it would be a revolving loan fund, interest and loan repayments would go back into the fund, providing capital for more loans.

Tony Marshall, owner of Raleigh-based Innovative Systems Group, said such a loan could be the cash infusion his company needs to manufacture dim compact florescent lighting on the commercial level.

"An investment of $400,000 would bring us jobs, get us manufacturing and also save us energy. We think it's a worthwhile investment," Marshall said, adding that he hasn't been able to find that capital in the private sector.

Dalton said the loans would go to such businesses as Marshall's that, he believes, are essential to the state economy.

“During this economic crisis, we’ve watched as big business received massive bailouts, but not enough attention has been paid to small businesses, which really are the foundation of our economy,” Dalton said.

"As I have talked with small business owners, I have heard loud and clear that more help is needed and providing these loans is a powerful step," he continued. "With our state unemployment rate at 10.7 percent, we must do everything we can to keep small business strong. "

Rep. Jim Crawford, D-Granville, pledged to work to keep the funding in the House version of the budget.


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  • gdail2 Apr 16, 2009

    If the private sector thinks a company is a bad risk then why is the government getting involved. Some of us built small businesses, a little at a time. Then we get to sit back and watch as government puts people in business, who haven't paid the price they we have paid. They take money from established businesses to fund those very same businesses' competition.
    Great system.

  • whatusay Apr 14, 2009

    NC can not even refund taxes to citizens who over paid but they have the money to fund small business loans?