As the federal government’s shutdown closes off a well-known source of financing for small businesses, banks and the state of Oregon are trying to spread the word about available alternatives.
“If you are being hampered, we’re here,” said Tom Schnell, Bend-based business finance officer for Business Oregon, the state’s economic development agency.
Business Oregon has two lending programs that parallel the U.S. Small Business Administration but with a few differences, Schnell said. He’s already three times busier than he was in January 2018, and he thinks some of the deals coming his way were redirected from banks that would otherwise use the SBA.
The SBA’s Portland office, which covers all of Oregon and Southwest Washington, announced in October that in the 2018 fiscal year it backed more than $471 million in loans to small businesses.
First Interstate Bank, based in Billings, Montana, acquired a large producer of SBA-backed loans when it bought Bank of the Cascades in Bend. For borrowers that are waiting for SBA loans to close, the bank will provide bridge financing, said Bill Kuhn, Bend market president. “We utilize Business Oregon as well,” Kuhn said. “If they have a funding need, and SBA’s not available, we’ll be looking to other alternatives.”
Similar to the SBA’s most popular program, Business Oregon can guarantee loans for working capital through its Credit Enhancement Fund, Schnell said. Business Oregon typically handles smaller deals than the SBA and has guaranteed a loan for as little as $40,000, he said. “We can do, potentially, startups if they show the ability to repay,” he said.
Most of the demand in Central Oregon is for direct loans for real estate, Schnell said. The Oregon Business Development Fund can loan up to $1 million to traded-sector business, such as manufacturers.
A Central Oregon greenhouse builder, NW Green Panels, will expand into a new, larger building in Terrebonne because of a $460,000 deal with Mid Oregon Credit Union and Business Oregon, owner Jeff Sagner said.
“I’m able to come into a commercial real estate loan with only 10 percent down,” Sagner said.
NW Green Panels has grown to 11 employees since it launched in 2013 and broke the $1 million revenue mark last year, Sagner said.
Business Oregon isn’t promoting its loan programs as superior to the SBA, Schnell said. Even if the shutdown ends soon, business owners might need an alternative if the SBA is faced with a backlog of applications.
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