Grand Rapids’ Economic Development Foundation grows economy, jobs across Michigan

Officials at the Grand Rapids-based Economic Development Foundation say they stand ready to help entrepreneurs throughout Michigan get funding for business expansion and job creation and retention.The Economic Development Foundation helps small businesses apply for low-interest Small Business Administration (SBA) 504 loans. That assistance has enabled Grand Rapids businesses like Adtegrity, Alternative Mechanical and Baribeau and Sons Jewelry Hospital to obtain loans to purchase buildings and equipment, and spur job growth, says Executive Director Sandy Bloem.”We walk the small business through the loan application process, get it approved, get the loan funded and then stay in touch with the small business through the term of its loan,” says Bloem. “With any government financing, the loan process can be pretty daunting; with us being in business for 30 years, we can put it all together and then say ‘sign here.'”The SBA defines a small business as one with a net worth of $15 million or less and a net income of $5 million or less. SBA 504 loan is a partnership between a bank or credit union, the SBA and the small business: the lender provides 50 percent of the loan amount, the SBA provides 40 percent and the business supplies a 10 percent down payment — much less than the 20 to 30 percent lenders require.The SBA portion of the loan carries a fixed interest rate for 20 years (for financing a building), a rate that is often lower than a bank’s, Bloem says. “It’s very common practice to give a loan for 20 years, but after five years the loan will balloon and the bank renegotiates the interest rate,” Bloem says. “I don’t know how your crystal ball works, but mine doesn’t tell me anything about the future of interest rates.”The outlook for economic development in West Michigan is good, says Bloem, and adds that growth in manufacturing, hair salons and microbreweries has prompted an increase in loan applications from local businesses in those industries.Source: Sandy Bloem, Economic Development FoundationWriter: Deborah Johnson Wood, Development News Editor