WHEDA Gives $1M In Loans To Small Start-Up Businesses

The Wisconsin Housing and Economic Development Authority has joined the federal government in sending loans to small start-up businesses.

The Federal Small Business Administration has run its “Community Advantage” loan guarantee program since 2011. This year, WHEDA joined in with $1 million to lend to small businesses in underserved rural or urban communities.

The WHEDA money matches what’s put up by the Wisconsin Women’s Business Initiative Corporation. This year, the two teamed up to make two loans totaling almost $250,000 dollars.

“One is a health care business and the other one is a brew pub,” said Wendy Baumann, president of WWIBC. “So I don’t know how you can get much more different than that.”

Baumann said that those two businesses have created nearly 20 jobs.

The $2 million between WHEDA and WWIBC are backed up by the SBA, which makes potentially risky start-up businesses more attractive to investors.

“It sweetens it a little bit,” said Baumann. “In theory, it should allow us to really do more because we can say to new investors of our portfolio, ‘X percentage is also guaranteed by this Community Advantage Program.’”

Amounts under $50,000 dollars are considered “micro loans.” Above that, they are small business loans.

Eric Ness is the SBA director in Wisconsin.

“You can do loans up to $250,000 dollars,” said Ness. “If you do loans up to $150,000 we guarantee up to 85 percent. Actually, right now there’s no fees to it, so it’s really a sweet deal to small businesses.”

The loans are usually called in after six or seven years. Interest rates are below market at 7 or 8 percent.