MACHIAS, Maine — The Machias-based Sunrise County Economic Council is being provided with $260,000 from the Rural Development division of the U.S. Department of Agriculture to make low-interest loans available to Washington County businesses and entrepreneurs.
The funds will be allocated to the council’s Intermediary Relending Program, which can provide as much as $50,000 to applicants eager to start or expand a business, usually in conjunction with a standard bank loan.
“We work with all the banks in the region to provide what’s known as ‘gap’ funding,” said Harold Clossey, the council’s executive director. “A small or large business might go to a bank and say I need so many dollars, and the bank might say that it can provide 75 or 80 percent, but not the entire amount, depending on credit history and a lot of other factors. With these funds, we may be able to make up the difference.”
Interest rates vary, Clossey said, depending on each applicant’s circumstances.
“Generally we try to keep the interest rate a couple of points above prime rate, which today would put the interest rate at 5.25 percent,” Clossey said Thursday. “With the fragile economic situation we are in, not only in Washington County but statewide, this funding is one of the tools we can use to assist local business development and expansion.”
Projects that are funded through the program can be as small as a lobsterman whose boat needs a new engine and as large as the Perry-based consortium of six organic milk producers who collaborated with the council’s help to create the MOOMilk product line after their contracts with Hood dairy were not renewed.
“These funds allow us to leverage money provided by the banks,” Clossey said. “As I recall, we leveraged about $1.2 million in calendar year 2011 and probably $2 million if you go back to 2010. We have a very robust lending department, and we work with a variety of projects.”
Clossey said the capital provided through the USDA program is critical to creating and retaining jobs in Washington County, which has the state’s highest unemployment rate.
“Whether we are talking about a start-up or an expansion, these funds are another tool in the toolbox for business owners and entrepreneurs to do just that,” he said.
In announcing the funding, Virginia Manuel, the USDA rural development director for Maine, said she’s hopeful that the loan program will jump-start new or expanded economic activity in Washington County.
“We look forward to increased business activity in this vital county as a result of our award to SCEC,” she said.
Clossey said the federal funds allocated won’t be in-hand for a few weeks, but he encourages those interested in learning more about the low-interest loan program to contact him at 255-0983.