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Matt Wrye, Staff Writer
Article Launched: 06/28/2007 06:39:42 PM PDT
Land of opportunity.
Those three words are exactly what loan officer Hilda Kennedy sees in the Inland Empire.
But for local small businesses wanting to become bigger, their opportunities to expand are often delayed or obstructed by mortgage costs and other loans that are geared toward big corporations.
That's why Kennedy, executive director of San Bernardino-based AmPac Tri State CDC, is trying to get the word out about AmPac's special financing for these mom-and-pop entrepreneurs located throughout the two counties.
The organization, which is a nonprofit certified development company, is seeking to help small businesses through loans from the U.S. Small Business Administration, a federal agency. These are loans with lower monthly and down payments compared to your average business financing, Kennedy said.
"The federal government wants to create jobs, because we know that small businesses are the backbone of our economy," she said. "SBA wants to contribute to that trend through this lending vehicle. We want to create jobs for our communities. We want to create a tax base."
Businesses must usually put 20 to 30 percent down on a loan when receiving financing from a bank or other
financial institution, Kennedy said.
However, borrowers through AmPac may pay 10 to 15 percent, depending on whether the business is new or not. Enough funding is usually available to cover up to 40 percent of a company's total projected costs with interest rates fixed for 10 or 20 years, depending on the type of loan.
"We work in conjunction with our partner banks to find similar kinds of ways (to support) longterm growth," Kennedy said. "Then the borrowers' monthly payments are less, and they have the working capital to grow their business."
Small business owners can apply for just about any type of loan: mortgage, lease-hold improvement, tenant improvement, machinery and equipment, and "things tied to fixed assets."
AmPac has helped a range of industries receive financing, such as manufacturing, automotive service, boat/marine service, and technology companies.
"(The companies) range anywhere from 1 to 50 employees," Kennedy said.
AmPac is trying to reach out to small business owners and entrepreneurs in faith-based communities who might be intimidated by applying for a conventional loan.
"They think it takes too long," Kennedy said about some business owners. "Often times they don't want the government in their business because they think there are too many strings attached. Or they don't have time to focus on it because they're just trying to meet their bottom line and service their clients to the best of their ability."
Like other loan institutions, AmPac charges administrative fees that help fund the organization.
Kennedy works there full time, along with three other part-time employees who all have experience in the financial industry.
"Since it's nonprofit, the CDC is a good catalyst for financing small businesses and real estate development," said Larry Polhill, board president. "It brings a lower cost of funds to the table. You can get higher loan values for a lower interest rate."
Matt Wrye can be reached at (909) 483-9367 or (909) 386-3890 or by e-mail at matthew.wrye@sbsun.com.
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