A two-plus-year-old loan program designed for small businesses have helped more than a dozen entrepreneurs.
The MiCRo loan program grew out of conversations among Cedar Rapids city officials and various organizations on how to best develop these types of small, local business owners.
A larger loan program was available to help businesses rebuild in areas hurt by the 2008 floods, but officials wanted to open up that opportunity to other areas of the city.
“These are people who have not owned a business before, may not know how to write a business plan, where to go for business assistance, who their market segmentation is, what equipment they need, where to get loans,” said Jasmine Almoayed, economic development manager for the city. “We wanted to help people who otherwise wouldn’t be able to participate in business.
“The city makes a small investment on the front end, and eventually these businesses are able to grow over time, hire employees and contribute to the success of Cedar Rapids.”
Loans from $500 — a “mini micro” — to a maximum of $10,000 are available, to be repaid over a three-year period with 4 percent interest. There are no income requirements, but the business has to reside within Cedar Rapids limits.
Since the MiCRo program launched in 2016, 13 small businesses have been accepted into the program, including the Pig and Porter restaurant and Mod’s Market downtown.
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Matt Melone, head chef and co-founder of the Pig and Porter in the NewBo District, learned about the MiCRo loan while working with the Small Business Development Center at Kirkwood Community College. He and co-owner Will Monk were still in the process of getting their portfolio together and gathering funds to start the restaurant in late 2015-early 2016, with the help of the Center’s regional director, Scott Swenson, when Swenson steered them to apply for the loan.
“That’s the fun thing about opening a restaurant, everything ends up costing more than it should,” Melone said. “The loan just got us over the hump so we could open and start operating.”
Melone also praised the loan’s flexibility and low interest rate.
“The interest rate is super low, I think the lowest we have,” Melone said. “They’re super lenient about stuff. When we had the floods (in September 2016), we paid only interest for a few months, that was super helpful.”
The MiCRo loan program is a partnership of the city, the East Central Iowa Council of Governments, the Cedar Rapids Public Library, SCORE, the Greater Cedar Rapids Community Foundation and the Small Business Development Center at Kirkwood.
The city put in an initial $50,000 to launch the loan program. Then foundation worked on fund development, energizing private investors initially and then area banks to give contributions to the program.
“This program is the difference between having a good idea take off and be successful and not taking off at all,” said Les Garner, president and CEO of the foundation.
“If you look around the country, you’ll see that small business growth is an important engine for urban economic growth. It also contributes to quality of life in urban areas because these are the businesses that provide core services.”
The Cedar Rapids Public Library downtown and on the west side became a front door for the program, with a customer service person at each location who is designated to help guide people who are interested in the MiCRo loan.
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The staff can help potential business owners with personalized research on their type of business, sketch out a business plan, and guide them through the MiCRo application or direct them to other loans if they would be a better fit.
“There’s a lot of really cool little businesses that just needed that little bump,” said Dara Schmidt, director of the library. “All of the partners have a skill set that we can contribute to helping them be successful … .
“There’s a lot of back and forth referrals between the partners to get people in the best place before the actual loan application so we can help them be successful.”
Once the loan has been approved, the program also provides technical assistance by matching businesses with a mentor through SCORE.
“It really gives the added resource and opportunity for smaller entrepreneurs to either start up their business or buy that extra piece of equipment that will allow them to take their business to the next level,” said Robyn Jacobson, contract manager for the East Central Iowa Council of Governments.
According to Almoayed, because the program is being handled through the East Central Iowa Council of Governments, if a person comes in and the MiCRo loan program is not enough for them, that organization can direct the person to additional funding opportunities it offers.
“The fabric of our city has been based on entrepreneurs. Some of our biggest businesses now, like Quaker Oats and Collins Aerospace, started from entrepreneurs from the area,” Almoayed said.
The MiCRo loan program “created a way to give non-traditional business owners a chance to participate.”