Help for businesses start-ups

"When the going gets tough, the tough get going" is the old adage and it's as true today as it ever was. Starting a new business or expanding a fairly new operation is challenging, even in the best of times.To save time and expense, Greene County Economic Development Corporation and its volunteer partners have created a step-by-step guide for those wishing to start a business. This can be found at www.gcedc.us/business.

Businesses spend money before they ever 'open the doors' and start generating any income. Start-up expenses include things such as legal and licensing costs, inventory, marketing, location selection and improvements. Of course, home-based businesses save on the expense of location costs and many low cost start-up ideas can be found on the internet.

Most businesses are started using the owner's monies, such as cash in the bank, tax refunds or proceeds from the sale of personal property. Some may have already accumulated a few business assets, such as equipment, supplies, machinery or office furniture. Beyond that, the owner needs to secure some financing.

Typically, next the owner will look to family and friends, to whom they will 'sell' the concept of their business idea, in hopes of selling them an interest in the business or borrowing what they need. Beyond that, a commercial loan is usually the next step.

The policies of financial institutions normally require at least two years of tax returns and business financial statements before they authorize the funding of a business loan. Plus, a lender will assess the business risk, as certain types of business, such as restaurants, have higher failure rates in the first year or two of business operations. Nowadays, with the current economic situation, it's even more challenging for a start-up business. However, the persevering and determined entrepreneurs find ways to start with very little or no money.

GCEDC administers the local revolving loan fund (RLF). This resource was originally created using U.S. Department of Agriculture grant monies and currently has funds available. It makes available modest low-interest loans for start-up and growing small businesses. This is one more way to create jobs. As these start-up and emerging companies grow, they will need to hire employees. Long-term, this means less local folks will be in the ranks of the unemployed.

As we don't want to compete with the local financial institutions, a potential borrower is required to first apply to their local bank or credit union. If, as a borrower, they don't qualify for a conventional loan or need a little more collateral to qualify, then the loan officer can contact GCEDC to make inquiry or referral. The local loan officers have been provided with further information and should be able to assist you in determining if your application might qualify for funding through this program.

Once an application is referred, GCEDC staff will schedule for the applicant to meet with a voluntary RLF committee that is comprised of local finance professionals and business owners. The applicant then has the opportunity to explain their business concept and personally address any questions the committee may have. If the RLF committee approves the loan, the terms are discussed with the client. When all parties are agreed, the RLF committee instructs GCEDC staff to process the loan. The loan is serviced through Crane Federal Credit Union, so payments can be made conveniently at your local branch.

As a final note, even if you applied for a conventional loan some time ago and were denied, check back with your original loan officer to request a copy of your denial letter and a referral to this program. Just as with anything worth having in this life, if at first you don't succeed, try, try again.

Joan Bethell is the executive director at Greene County Economic Development Corporation and can be reached at (812) 847-4500 or jbethell@gcedc.us.