Nov 26, 2012 (The Modesto Bee - McClatchy-Tribune Information Services via COMTEX) --
The U.S. Small Business Administration approved nearly $78 million in loans and loan guarantees for Northern San Joaquin Valley businesses during its 2012 fiscal year.
That included money to build, buy and renovate buildings, loan guarantees to help businesses secure bank funding, and debt refinancing to provide companies lower interest rates.
Those taxpayer dollars went into big projects such as constructing motels and refurbishing office buildings, as well as medium-size shops for new services and cash for tiny startup ventures.
Some of that money, unfortunately, financed building purchases to allow Modesto employers to move out of town.
TeleContact Resource Services, for example, moved its expanding operation to Riverbank, and 1st Light Energy is shifting its headquarters to Manteca.
More than 140 businesses in Stanislaus, Merced, San Joaquin and Tuolumne counties received funding assistance from the SBA during the fiscal year that ended Sept. 30.
"These loans demonstrate our continuing partnership with local lenders and collaboration with our vast business development network in meeting the unique financing needs of small businesses," said Carlos Mendoza, director of the SBA's Fresno district office.
Mendoza acknowledged "the continuing challenges when it comes to getting loans in these difficult times."
Many steps, much scrutiny
Business owners who made it through the SBA lending process agree that it's grueling.
"It certainly is a government-run program that's as excruciating as an IRS audit," said Julie Hutchings, who runs eContact Live Inc. and TeleContact Resource Services.
Hutchings' company received $1,070,000 in taxpayer money to help buy and remodel the long-vacant call center at 6436 Oakdale Road in Riverbank. Her staff moved in this summer, leaving its cramped rented facility in Modesto.
The renovated 42,000- square-foot call center gives the marketing support service room to expand.
"We've hired 22 employees since we moved, and we're still growing," Hutchings said. During an open house from 4 to 7 p.m. Friday, her firm, which has more than 125 staff members, is inviting the public to view what taxpayers helped finance.
Dimitri Voulgarakis also would like people to visit his new Premier Car Wash and lube shop at 3117 E. Service Road in Ceres, but he knows the rainy season isn't the ideal time to wash cars.
That's why he had planned to be open for business last spring. But "SBA delays cost us," Voulgarakis said, so he couldn't start operations until Oct. 1.
"It took us more than a year to get approval. It was very hard work," said Voulgarakis, noting that he's still fighting for the project's final piece of funding. "It doesn't need to take so long."
Voulgarakis' Deanami Development Group business partner and son-in-law, Pierre Sayad, said the SBA staff lacks a sense of urgency when processing loan applications.
"With the huge problems we're having with our national economy, we would expect more support and efficiency from the SBA, especially when companies like us are making such large investments," Sayad said. He said the SBA attitude seemed to be, "If we don't get to it today, there's always tomorrow."
While their company received $1,425,000 in SBA loans to buy the land and build the shops that now employ 20 people, Voulgarakis said it expected $1.7 million.
"They approved the change order five months ago, but (the additional funding) hasn't come through yet," said Voulgarakis, who doubts he'll ever want to work with the SBA again.
Justin Krum had better luck getting $472,500 in SBA funds to help buy a vacant Manteca facility for his 1st Light Energy company. That 122,404-square-foot building on Moffat Boulevard had been occupied by the now-defunct Aqua Pool & Spa.
"The process for us was fair," Krum said about working with the SBA. He agreed that getting the loan required submitting lots of paperwork. "It's the government, and it wants to protect taxpayers."
Krum's solar panel installation company, now with headquarters on Modesto's McHenry Avenue, will move to Manteca in January. Its Oakdale warehousing staff and operations also will move there.
"We've been limited by space in our Modesto location, and we need to hire more people," said Krum, explaining the move. He said the company has more than 45 employees in Modesto, plus about 15 in Oakdale. "We're definitely going to be adding on sales teams and installers."
While much of the SBA's funding last year went for buying and renovating buildings, some of it paid for the materials and labor costs needed to launch small ventures.
Clay Everett, a theater professor at California State University, Stanislaus, received $20,000 to expand his CNE Creations enterprise.
In 2008, Everett started designing entertaining installations for Stanislaus County Fair attendees to wander through, such as a dinosaur habitat and a tropical rain forest.
Artistry for fairs
When other fairs expressed interest in having Everett create such temporary exhibits for them, he recognized the business opportunity.
"The fairs pay me like they pay a rock star to perform a concert," said Everett, explaining how being able to go through his exhibits is covered as part of the fairgoers' entry fee.
This year, he was asked to craft a walk-through "Rainforest Adventure" for the massive Puyallup fair in western Washington state. To do that, however, he need to hire workers and buy materials.
Everett turned to Chase Bank, which hooked him up with the SBA loan. He said the lending process took only about a month, and he already has been able to repay the loan.
"That money allowed me to hire two guys" who worked mid-May through mid-September building the rain forest, Everett said. About a dozen teens got jobs to staff the exhibit during the two-week September fair.
"Puyallup has the biggest fair on the West Coast ... and 143,000 people went through that rain forest," Everett said. "Without that loan, I couldn't have done it."
Everett plans to seek another SBA loan to create additional exhibits for fairs next summer in Alaska and Los Angeles.
Bee staff writer J.N. Sbranti can be reached at email@example.com or (209) 578-2196.
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