By ED PILOLLA

Staff writer

When an entrepreneur knocks on Teresa Huffman’s door at the county economic development office looking for a loan, one of the first things she does is ask for a business plan.

“Just because it’s a great idea for a business does not always mean it’s the right time,” Huffman said.

If the idea is sound, the county can help with two different kinds of loans that typically max out at $15,000: microloans and Rural Business Enterprise Grant loans.

Microloans require that most employees of the business qualify as moderate to low-income by state standards, said Christie Henry of South Central Kansas Economic Development District (SCKEDD), the administrator of the microloan program. A business cannot have more than five employees, including the owner.

It’s a small loan meant for business people who “can’t waltz into a bank and get a loan,” Henry said. They do not have to have perfect credit, but they cannot have a too terrible a credit history either, Henry said.

“We do everything we can to ensure that they pay it off, but we are also little more lenient,” Henry said. “It’s ideally for working capital equipment. It’s not really large enough for creating an inventory, though it can be used for inventory.”

The microloan annual interest rate, between 7 and 8 percent for the last microloan Marion County approved more than a year ago, is set by the county at one point above prime, officials said. The RBEG loan rate is 4 percent. Recipients of RBEG loans, which have been available through Marion County since 2007, require a good credit history, Huffman said.

Huffman heads a five-person county loan board that makes the final decisions on who gets a loan and who does not.

Since 2007, the county has made four RBEG loans, totaling $80,000. Three of the businesses received $15,000 loans, and the county granted one business an exception in the loan amount and it received $35,000, Huffman said. One of the businesses has paid its loan back in full; the three others are currently making on-time payments, Huffman said.

The four loans have leveraged more than $148,000 in total investment, Huffman said. The RBEG loan program began with $50,000 in 2007. The current balance is $27,000.

The RBEG funds came from the U.S. Department of Agriculture. The funds for the micro loan program came to the county years ago from the state in the form of community development block grants.

The microloan program, which began in 2002, has made 18 loans for a total of $195,972. Ten loans are paid in full. Two remain active, and six loans have been defaulted, Henry said.

The Bait Bucket, a recently opened tackle and live bait shop at the reservoir, took out a RBEG loan last year to get the business off the ground.

“Teresa (Huffman) really helped us out,” said Bait Bucket owner Rachael Naerebout. “She pointed us in the right direction.”