Welcome Help for Small Businesses ANNE ARUNDEL COUNTY

February 01, 1993

Let's say you're the owner of a small print shop, and you need $50,000 to buy some state-of-the-art equipment to keep your business competitive. That's a lot of money to you, but, unfortunately, it's small-fry to most commercial banks. A loan that size wouldn't generate enough profit to make them look twice. What do you do?

Tonight, the Anne Arundel County Council has an opportunity to give small businesses a much-needed financial alternative. County Executive Robert R. Neall has asked for an expanded economic development loan program that would double the amount of assistance now available to small entrepreneurs through the county -- without costing taxpayers a penny.

The idea of a county loan program for small business is not new. Since 1987, 24 small local businesses have found help through a loan fund provided by the county with fees collected from Industrial Revenue Bond issues. But IRB sales are down, which means the loan fund -- it now contains $1.2 million -- isn't growing.

The good news is that county Economic Development Director Michael Lofton has found 16 area banks willing to provide lines of credit totaling $1.45 million for small business loans. If the council approves Mr. Neall's bill, that money, plus the $1.2 million, would be available for distribution to eligible businesses at low interest rates.

As straightforward as this bill is, it does involve the "P" word -- privatization -- and that is certain to cause some consternation. It would create a non-profit corporation to administer the program, a step some fear is a prelude to privatization of the entire economic development office. In fact, Mr. Neall has always expressed a desire to privatize that office (and other government functions), but is hamstrung by protective union contract language.

All of this is a separate issue that should have no bearing on approval of the loan program. It is, as Mr. Lofton said, a "bloodless privatization" that hurts no one. The bill also ensures that the county will not lose control over the fund by requiring regular audits and financial reports.

Eventually, Mr. Lofton says, it's not unreasonable to expect the fund to grow as large as $10 million. In these tough times for small business growth, that's an opportunity the county can't afford to pass up.

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