Complex loan application may daunt businesses
By JENNIFER WILSON
News editor
A lengthy and complicated application may be deterring Marion County business owners from applying for a new loan program.
The micro-loan program, which is sponsored by the Marion County Economic Development Council, offers loans of up to $15,000 for small businesses that meet specific criteria.
Although many applications have been sent out, only one has been returned, according to Susan Cooper, economic development coordinator for the City of Marion. Cooper applied for the grant last year on behalf of the county.
Cooper thinks that the size and complexity of the application may be too daunting, discouraging business owners from completing the entire thing. It's the size of a "little book," she said.
"It's quite overwhelming," Cooper said.
At the Oct. 9 MCEDC meeting, Cooper reported that no applications had been returned. But as of Monday, one application had been returned, and it will be considered by the micro-loan review board within two weeks. The review board awards the loan.
The name and location of the business is confidential, Cooper said.
Cooper didn't know how many applications had been distributed or where, since they are distributed through individual city offices.
One change to consider may be to make the initial application simpler. That application would be sent to the review board, and a business would be approved with the contingency that they'd supply the rest of the information later.
Since the micro-loan program is a federal program, all of the information on the main application will eventually be required, Cooper said.
Cooper has been discussing possible changes to the application process with the MCEDC and the South Central Kansas Economic Development Division, or SCKEDD. SCKEDD administers the loan money.
The program originates with a $100,000 grand that the county received from the Kansas Department of commerce and Housing. Marion County was awarded the grant in February, after applying for the money in October of 2001.
Small businesses from Tampa to Hillsboro to Goessel can apply for a loan up to $15,000. Uses for the loan can include starting a new business, buying property, or acquiring new property.
Each loan comes with an interest rate of four percent below New York Prime, but not less than five percent. Loans should be repaid in five to ten years.
Businesses must meet certain requirements to qualify. Only small businesses with five employees or fewer can apply, and each company needs to have a copy of its business plan. In addition, 51 percent of the applicants must meet the criteria for low- to moderate-income status.
