Newspaper article THE JOURNAL RECORD

Finance Agencies Offer Way to Assist Small Firms

Newspaper article THE JOURNAL RECORD

Finance Agencies Offer Way to Assist Small Firms

Article excerpt

Some small business complaints about the lack of assistance could be solved with a direction of state finance agencies.

Most Oklahoma business and economic development incentives center on attracting large companies with huge payrolls, such as the Oklahoma Quality Jobs Act that gives a tax rebate for new jobs in the state. Minimum payroll to qualify for this benefit, however, is $3 million.

Small business owners have asked since that bill was passed in 1993 that the payroll threshold be lowered or some other program be adopted to help small business expansion. That help could be forthcoming, in the form of lower interest rates for companies that expand with assistance from community industrial development agencies. "If the (Oklahoma) Development Finance Authority were to become more of a partner, instead of just a loan agency, we could help the small business expand," said Jim Fulmer, the agency's executive director. If the community development authority were to pledge its assets and cash flow to help the expanding business, then the interest could be lowered as much as 1 point, Fulmer said during a joint meeting Wednesday of the development authority and Oklahoma Industrial Finance Authority. "Instead of making our loans for the traditional two-thirds ratio of value to loan, by entering more of a partnership with the (community) development authority, we could perhaps have a 100 percent ratio of value to loan," he said. "Of course, we would need some credit enhancement funds on this, but it could be done." Since the loans also could be done under a tax-exempt bond, the normal interest rate of 7.5 percent on a 15-year loan could be lowered to 6.5 percent, "since we are using public funds," Fulmer said. Because of the authorities' loan default experience, there would be no problem in getting this type of loan. There probably would not be any more defaults than at present, he said. "This would be a way that we could provide some state assistance for local businesses that are wanting to expand," he said. "Instead of being a conduit loan, we could take a look at building loan financing. …

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