Sep 17, 2008

Cedar Rapids businesses think state’s new Jumpstart could helpBy James Q. LynchGazetteOnline.com

Cedar Rapids, IA — “Every little bit helps,” Nan Barta said Tuesday as she studied a forgivable loan program to help Iowa’s small businesses recover from spring weather disasters.

The question for Barta and other small business owners was whether Jumpstart, the state’s newest piece of assistance, fits into their particular financial puzzle.

“I think it will help,” said Bob Schaffer, one of the owners of the Czech Cottage where Gov. Chet Culver’s explained the program on Tuesday.

Under Jumpstart, businesses that receive Small Business Administration, bank or credit union loans can get a forgivable loan for as much as 25 percent of that loan, up to $50,000.

“That will help literally thousands and thousands of small businesses get back on their feet,” Culver said.

Schaffer and his family have been approved for an SBA loan. They may tap Jumpstart to help pay for insulation and energy-efficient equipment — a requirement of Jumpstart — and hope to have their gift shop open by November.

That was Culver’s goal in using his executive authority to make $40 million in state funds available — divided equally between homeowners and business owners. He noted SBA loan regulations aren’t as generous as they once were.

As of Monday, the SBA had made 459 loans for $68.4 million at 4 percent interest in Iowa, an SBA spokesman said. Another 54 loans for $3.3 million were made at the “market rate” of 8 percent interest.

Barta, whose Saddle & Leather Shop celebrated its 100th anniversary this year before being washed out by 12 feet of flood water, faces $750,000 in costs to restore her building and replace her inventory. She’s been approved for a low-interest, long-term SBA loan, but even if she gets the $50,000 maximum from Jumpstart, Barta isn’t sure how she would repay her loans.

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