Sonoma County Economic Development Board is advancing in its effort to assist very small "micro-enterprise" companies in their access to capital, with plans to begin rolling out a targeted technical assistance program before the end of this year.
With a $30,000 community development block grant provided this year to help develop the initiative -- and the potential for $50,000 in additional grant funding authorized by the Sonoma County Board of Supervisors -- the program seeks to establish a hub for seminars and one-on-one consultation for those borrowers in Sonoma County.
[caption id="attachment_82127" align="alignright" width="360"] The EDB's new offices at 141 Stony Circle in Santa Rosa (photo courtesy Al Lerma, EDB)[/caption]
It would be among the latest efforts to help a group of aspiring or current business owners that typically faces steeper hurdles when seeking a commercial loan, providing mentorship to those borrowers while connecting them with lenders that have specialized in serving owners of so-called "microbusinesses."
"In some instances, an individual will go through some kind of small business program -- they are given some tools, but not always the 'light at the end of the tunnel' of financing," said Al Lerma, program manager at the EDB and former manager of the Small Business Loan Fund in San Francisco.
Lenders and economic development organizations alike acknowledge the outsize role that microbusinesses play in the broader economy. Yet those ventures, which the EDB approximates as five employees or less, also present a higher risk profile and smaller return for lenders compared to larger or more established businesses.
Non-depository lenders -- generally nonprofits focused on supporting entrepreneurship in economically distressed communities -- have been among the most active in seeking to fill that vacuum, with loans that frequently include a significant requirement for business education. The EDB had also considered launching its own loan fund, but ultimately found partnerships in microbusiness lenders that have already grown their push in the North Bay.
Among those partners is San Francisco-based Working Solutions, which now operates an office in San Rafael's Renaissance Entrepreneurship Center. Yet the effort could produce referrals to others as well, including Oakland-based Bay Area Small Business Finance, Santa-Rosa's SAFE-BIDCO and a recently announced program between Community Action Partnership Sonoma and Redwood Credit Union, Mr. Lerma said.
The effort is expected to dovetail with existing programs at the EDB, which include free access to extensive market data for Sonoma County and advising for launching or relocating a business. The organization's roomier new headquarters at 141 Stony Circle in Santa Rosa will be able to better accommodate workshops related to the program, and the EDB has begun its outreach to regional chambers of commerce and Hispanic business groups to generate interest as offerings accelerate in the coming months, Mr. Lerma said.
While the EDB has already helped microbusiness owners to obtain financing on a case-by-case basis, its larger-scale targeted program could launch as soon as November or December, he said.***
Improving loan quality has helped Santa Rosa’s Exchange Bank to realize a profit of $11.43 million for the first nine months of 2013 — up 27 percent compared to the same period last year, the bank announced.
The bank had an after-tax profit of $4.41 million for the three-month period ended Sept. 30, up from $3.21 million in the third quarter of 2012. Deposits have increased by $114 million, to $1.53 billion, and loans have risen by $37 million, to $1.05 billion.