A $50,000 state grant announced Wednesday is being utilized to establish a Revolving Loan/Grant program to assist small businesses in Herkimer County.
Aimed at commercial, industrial, manufacturing as well as agricultural businesses with 10 employees or less, funds will be used for projects of up to $6,000.
Applicants will be eligible for $2,000 in grant form and a $2,000 matching loan, with a 2-percent interest rate repayable over 24 months, while providing up to $2,000 of their own equity or capital.
Assemblyman Marc Butler (R-Newport) said he secured the grant during a tight state budget cycle. But the relatively small amount is considered a “pilot program” or “seed money,” he explained at the Herkimer County Chamber of Commerce in Mohawk.
For many small businesses strapped with cash flow problems or struggling to pay energy costs, access to such funds is “purely a matter of survival,” Butler added.
Richard Becker, of Mohawk, owns a family-run dairy farm on a 600-acre plot of land with 65 cows and attested to the thin line many county businesses walk.
Commenting on the tight credit market, especially for farms, Becker said making other revenue streams available opens up much-needed financial option.
“This will really help us guys in agricultural in the short term until the price of milk goes up,” he said.
Chamber of Commerce Director John Scarano said this kind of support for existing businesses is the grant’s purpose. While everyone understands job creation is needed in a tough economy, this shows “retention is important too,” he added.
Chamber officials and members actually worked over the past year in helping form program specifics. Becker, who is a member, said agricultural loans were included promptly after the chamber explained the demand.
Already having existing structures for RLFs, a county Industrial Development Agency committee will be tasked with processing applications, according to Butler.
Mark Feane, IDA director, said the new program will fill a “void” by making funds available to smaller retail, commercial and agricultural businesses.
While the IDA has a RLF of over $1 million based on federal funds, criteria for job creation and business models excluded these markets.
Applicants will be evaluated on a case-by-case basis, with those with a probability for success gaining a certain degree of priority, Feane said.
The IDA’s goal is to manage this RLF to provide funds long-term for businesses, he said.
But the size of the seed money can also be elusive of the impact.
The now $1 million federal RLF was down to roughly $45,000 seven years ago, Feane explained. Although the small business program may not regenerate as quickly, due to its $6,000 limit, “that’s the concept we want to follow,” he added.
Mohawk, N.Y. —
