The Haines Borough Assembly last week voted to authorize continued participation in a regional revolving loan program operated by the Juneau Economic Development Council.
Haines’ participation in the fund started in 1998, tapping into some of $2.2 million in economic disaster funds provided to the borough by former U.S. Sen. Ted Stevens, in the wake of lost timber sale receipts. Loans made included $60,000 to Haines Sanitation for composting equipment and $32,500 to Chip’s Excavating. That money was supplemented by other loan funds secured through JEDC.
Others that got loans through JEDC included Thunderbird Hotel and Grizzly Greg’s.
The contract between the borough and JEDC, which approved and administered loans, expired in 2008.
Margaret O’Neal, JEDC director of operations, spoke to the assembly and Haines Chamber of Commerce last week. She said interest in the program waned in recent years, but was stronger at the program’s outset.
“When (interest) rates were really high, it answered a need for affordable financing for start-ups and businesses that were growing,” she told the assembly. “When rates are low, you don’t get much demand. We did really well when rates were eight or nine percent. Now that the banks have gotten tight again, if the economy starts to grow and they don’t loosen up, this will be a need.”
O’Neal said JEDC would like to continue the relationship with Haines and do a better job of outreach. The JEDC also has more personnel with loan expertise devoted to the program than previously, she said.
Businesses must have a business plan and collateral or cash to qualify for funds through the program, O’Neal said. No grants are available.
Money loaned through the revolving loan fund often can be matched with other money from the U.S. Department of Agriculture, she said. As JEDC is reconstituting its loan approval committee, it would also like a local person on that board, O’Neal said.
The loan fund represented a way for the borough to stimulate economic development while removing lending from the political process, O’Neal said. At one time, JEDC received referrals for the program through a Haines-based economic development committee, she said.
She said most of the loans through her agency involve two or three different lenders, as a way to spread risk.
The municipality has contributed about $110,000 to the revolving loan fund, and, as most of those loans have been paid off, has about the same amount to loan at this time.
She estimated the program costs the borough about $1,000 per year.