Like a vigilant gardener, the role of a Local Economic Development Authority (EDA) is to water the seeds of economic promise in its community and, with luck, watch them grow into successful businesses.
An influential service that EDAs provide is the distribution of funds through loan and grant programs. When delivered at the right time, funding gives businesses the boost they need to get off the ground.
EDA Blue Earth received an increase in interest in its various loan programs this year. In 2022, it distributed a cumulative $75,000 in forgivable loan funds and $47,660.20 through other grant programs.
It also implemented a brand new program this year: a home provider grant designed to help local child care providers finance improvements to their home businesses that are subject to high attrition.
This year, a total of 18 Blue Earth businesses received financial awards from the EDA. Refresh Salon and Spa, owned by Shawna and Mike Hannaman, was one of them.
The salon was one of three businesses to receive a $25,000 forgivable loan from the EDA in 2022. The purpose of the program is to promote and ensure the continuation of existing businesses in Blue Earth.
The Hannaman family applied for the loan after purchasing Classic Cuts Salon. They are using the funds to partially fund the installation of new chairs, a dispensing sink, a washer, a half wall, a tanning bed and signage, as well as new products and interior paint for the salon.
The improvements cost about $75,000, $50,000 of which the couple is financing themselves and $25,000 of which was borrowed from the EDA.
Hannaman indicates that planned improvements are underway.
“Vine, (foreign) was a great help,” says Hannaman. “It’s amazing how much funding a small town has available.”
Michele Hard, owner of Michele’s Sewing and Quilting Center, applied for a different EDA program: the Commercial Improvement Loan Program.
After moving into the former Ankeny Furniture Building, Hard used the funds to help finance the many improvements she made to the space.
Last spring, Hard repainted the interior of the store, installed new lighting, ceiling tiles and carpet, refinished the floors and redid the bathroom. She also installed new signs and a canopy outside.
She used the funds she was awarded by the EDA to cover the installation of the tent.
Hard says she had been aware of the EDA’s loan programs for a while and decided it would be a good idea to inquire about funding for one of her projects.
“It’s always good to know what your options are and if you can get any help with updates,”she said.
Other EDA boards in the county offer similar opportunities for local businesses.
Wells EDA offers a plethora of loan and grant programs, including a Commercial Building Improvement Grant, which businesses can use to make improvements to their buildings, a revolving loan fund, and a child care forgivable loan program for assist in the process of establishing licensed and renovating quality childcare places to provide local families.
The board has also introduced a new grant opportunity: the COVID-19 Income Loss Assistance Grant, which helps area businesses that suffered a loss of income during the pandemic. Wells committed $25,000 to the American Rescue Plan Act (ARPA) program, and eligible businesses can receive up to $5,000.
In 2022, the Wells EDA distributed $16,899.55 in commercial building improvement grants, $7,000 in revolving loan funds and $2,000 in COVID-19 income loss relief funds.
The Winnebago EDA also offers several programs, including an External Grant Program, which is a dollar-for-dollar matching program with a maximum grant of $6,000 and revolving loan funds. In 2022, EDA distributed $74,000 to nine area businesses: $33,000 in External Grant funds and $41,000 in revolving loan funds.
Amy Schaefer, Blue Earth’s EDA specialist, says she loves seeing local businesses use their grant funds to make a successful start-up.
“I often have the pleasure of starting from scratch with new business owners.”Schaefer says. “It’s very rewarding to watch the process of developing a business plan, discover the cash flows and projects, and see all the work these business owners do before asking for money is even an option.”
She concludes, “Our business owners work hard, and I’m excited to be able to help them on behalf of the EDA.”
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