Entrepreneurs in Jefferson County are going to have a harder time finding startup money, now that a loan fund meant to help them is running low. That's good news and bad news.
Here's the bad news: The Industrial Development Agency's micro-enterprise loan fund is down to about $31,000. That means the next successful applicant is going to drain it dry.
"At some point, someone is going to come to the loan fund for dollars for their business, and we won't have any to lend," says Don Alexander, IDA chief.
The fund drying up is no surprise, he says. It was created by a grant almost two decades ago. Since then, its only income has been loan repayments with a small amount of interest. But, Alexander says, the good news is that money, about $400,000, is invested in new businesses, and creating jobs.
"One that jumps to mind is George Anderson of Current Applications, who started out very small, one or two employees with an idea, borrowed from this fund, set up a shop here, began to expand his business, and ultimately moved to his new building in the Watertown industrial park," Alexander says.
The builder of custom motors now employs several dozen people.
The fund's governing board is looking at options to replenish its reserves. They could sell off loans at a discount to get immediate cash, seek out another grant, or try to create another fund using IDA resources.
Some on the board worry certain loans have been too risky, and want to review how they evaluate applications.
In the meantime, Alexander says they'll work with two other lenders – a city fund, and another IDA fund that targets larger-scale projects – to try to fill the gap.