Cedar Rapids unveils microloan program to help small businesses

CEDAR RAPIDS - Lenny Sims made a point of being there Tuesday when the city and a mix of community partners launched a microloan program designed to turn workable ideas and thin wallets into business success stories.

The microloan program, which will provide loans of between $1,000 and $10,000, is a new part of the city's existing Business Assistance Revolving Loan Fund program, which has provided loans of up to $50,000 to businesses since December 2013. The revolving fund was seeded with $500,000 from disaster funds from the flood of 2008.

Sims, an owner of the 3-month-old Sauce Bar and Bistro at Czech Village, received one of the larger loans and Tuesday was on hand to say how vital such lending can be in turning an idea into a business.

'We probably would have found a way to open because we already had put a lot of money into the business,” said Sims, a Jefferson High School and University of Northern Iowa graduate. 'But the loan took a lot of pressure off my family and my partner's family. It's really helped.”

City Manager Jeff Pomeranz credited Les Garner, president and chief executive officer of the Greater Cedar Rapids Community Foundation, with advocating creation of the microloan program. Garner, in turn, credited foundation donors Barry and Gilda Boyer with pushing the idea to him and contributing to it.

The foundation is putting $25,000 into the program while the city is steering $50,000 to it from the existing business revolving fund.

Garner said community foundations across the nation have seen how microloans to startup and small businesses that are growing can be a 'critical tool” in the economic development of urban core neighborhoods.

He said he envisioned microloans being provided to small neighborhood shops and service businesses, which he said can create greater economic activity that 'filters out and multiplies throughout the rest of the neighborhood.”

'We're also hoping we might see some of the recent immigrants to Cedar Rapids who have a good idea or may have brought a certain talent to be able to put down some roots and establish a business,” Garner said.

Scott Swenson, regional director of the Small Business Development Center at Kirkwood Community College, said he works with a couple hundred prospective small businesses a year, many of which are the brainchild of women, minorities and lower-income residents. The 'hardest part” arrives when it's time to fund it, and microloans will help some get going, he said.

Greg Christensen, chairman of the local SCORE chapter of business professionals, said his group will help set up business plans and mentor people seeking microloans to open a business.

The Cedar Rapids MICRO program promises 'Micro loans. Mega impact.” The regional planning agency, the East Central Iowa Council of Governments, will administer the program.

Doug Elliott, ECICOG's executive director, said he expects an immediate flurry of interest.

He said it was not uncommon in years past for 'cottage industries” to start in the basements of homes. He said he could envision catering businesses and even information technology start-ups as the kind of businesses that might show up to apply for microloans.

The loans are for three years and come with a 4 percent interest charge.

Mayor Ron Corbett said he has talked a lot about Cedar Rapids 'being open for business.” But it's not just big businesses or existing businesses, he said.

'It's the whole spectrum,” the mayor said. 'Yes, large businesses are key. … But it really is the small business that is the backbone of Cedar Rapids.”

Find out more

' What: The Cedar Rapids MICRO program, microloans of $1,000 to $10,000, for three years at 4 percent interest a year.

' To get started: Contact Nancy Geiger (739-0455) or Yongan Wu (739-0458) at the Cedar Rapids Public Library.

' For more help: Contact Robyn Jacobson (365-9941 Ext. 134) at East Central Iowa Council of Governments.