Loan program for small, minority firms unveiled Glendening proposes $10 million over 5 years

October 22, 1998|By Shanon D. Murray | Shanon D. Murray,SUN STAFF

Gov. Parris N. Glendening unveiled his proposal yesterday for a five-year, $10 million loan program that would aid small, minority and disadvantaged businesses that are more likely to be turned away by traditional lenders.

The Maryland Competitive Advantage Loan Program would be available to small businesses owned by people of color and women, and white men who prove they are socially or economically disadvantaged, officials said.

"Even our best efforts to bring jobs and economic development to Maryland will be insufficient if we do not ensure that we include everyone in that growth," Glendening said at a breakfast meeting with minority and small-business owners in Northwest Baltimore.

Other programs are available to the same market, such as those administered by MSBDFA Management Group Inc., which provides venture capital for disadvantaged small businesses in Maryland, officials said. But such programs usually reach a small segment of the targeted market, officials said.

"This program is an additional resource that adds to our portfolio," said James D. Fielder, acting secretary of the state Department of Business and Economic Development. "We do not and cannot service the market in this way with our current services."

The program is being developed by the governor's Office of Minority Affairs and DBED. If approved by the General Assembly, the program would go into effect after July 1, officials said.

The loan program would be set aside for businesses that have less than $1 million in sales annually and operate in a broad range of industries, including retail, restaurants and professional services and manufacturing, the governor said.

It is geared to those with some equity but not enough to get commercial bank loans, he said.

The program would dispense flexible-term loans ranging from $10,000 to $100,000 to young businesses and some start-ups.

It would be designed to assume more risk to help those small businesses not serviced by traditional lenders, officials said.

Reaction among business owners ranged from skepticism to excitement.

"I've seen programs come and go," said Robert L. Clay, president of the Robert Clay Co., a general contractor in Laurel.

"This could be an innovative idea that could stimulate hope and help, or this could be a program that is not as effective as we would like it to be," he said.

William B. Garrett, co-owner of Physical Therapy Associates, in the 2500 block of N. Charles St., said the loan is something he wishes had been available when he started his business nine years ago.

"A bank would not give us a loan," Garrett said. "We had to do subcontracting work for four years to save money to open our office.

"Now we're looking to expand and buy new equipment, so maybe this will be something I can look into."

Pub Date: 10/22/98

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.