$1 million loan to benefit Butte businesses

As of Monday, the Butte Local Development Corp. is $1 million richer, and that means that eligible Butte businesses will benefit.

The agency announced that it has received its sixth loan through the Department of Agriculture’s Intermediary Relending Program. To obtain the funding, the BLDC needed matching money, which was provided with $250,000 from the Montana Board of Investments.

By Leslie McCartney of The Montana Standard

http://www.mtstandard.com/articles/2004/05/11/newsbutte/hjjfjeiijchifd.txt

The money is loaned to the BLDC at a low interest rate; in turn, that money is lent to businesses at a slightly higher rate. The result is that not only are businesses helped with access to capital, the payments made help establish a revolving loan program that can be drawn upon for years to come.

"This is a good news day for Butte and economic development," said BLDC Executive Director Evan Barrett. He pointed out that while the $1 million is immediate, the city will see about $2 million trickle into the community. That’s because the BLDC’s money will leverage another $1 million in bank funds or equity.

John Guthmiller of USDA Rural Development said the BLDC has more Intermediary Relending Program loans than anyone in the state.

"You have a very active development group," he added.

He said the Department of Agriculture borrows the lending program money from taxpayers and is paid back at 1 percent interest over 30 years. The effect, he said, is that the USDA get its money back, and it sees increased income taxes and benefits from the businesses and their employees.

Typically, businesses seeking lending program money are more of a risk than established businesses and need help establishing credit worthiness. However, Barrett said that banks partner with the BLDC on such loans to make business plans a reality or expansion plans feasible.

"This is really the best way to create jobs," Guthmiller said.

The new money also adds to the BLDC’s array of 13 different state, local and federal programs that can be tapped to help new business borrowers. In the last eight years, Barrett estimated that more than $11 million in loan money has been spent in Butte through his agency’s efforts.

Monday’s announcement also spotlighted a business aided by lending program money.

"It helped us tremendously," said E-Docs’ Tressa Orizotti Colomb, who said her staff has expanded from 3 to 16 people. "We look forward to more jobs in Butte."

— Reporter Leslie McCartney may be reached via e-mail at [email protected].