Microloans Give Small Business Startups a Boost

Small business startups will have a source for credit in Northeastern Wisconsin. The Small Business Administration is providing a half million dollars in loan capital.

Advance Brown County has had a microloan program for the last year and a half. It has helped a dozen businesses with loan guarantees from private banks. Now, with its track record of no defaults, the SBA is going to back another $500,000 in loans.

Recipients must pay 8 percent interest. Still, the Director of the Microloan Program Marianne Dickson says they would not have been able to secure funding on their own. “And it could be because someone might not have enough collateral. It’s a start up business. It might be personal credit issues. It could be the size of the loan.It’s very difficult for banks today to make loans of $10-25,000. Our average loan is 32,000 [dollars].”

Dickson says the previous loans from the private lenders helped create new businesses that run the gamut from food trucks to printers and laminators. The Microloan program has also helped people buy companies. “We’ve helped two businesses actually buy existing businesses. One was Stadium Bakery. Another one was called Blue Sky Fishing Lures.”

Dickson says the private lenders will still be involved with the microloan program, even in light of the federal SBA infusion. Bank representatives will sit on a loan committee that scrutinizes the applications, and the institutions will provide financial backing.