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<br />Status Report on Orange County Small Business Loan Program
<br />Prepared September 25, 2009
<br />Economic Development Department
<br />In 2000, the Orange County Small Business Loan Program (Program) was created to provide
<br />loans for small businesses to help stimulate the creation of jobs for Orange County residents, as
<br />well as to support successful business development and expansion in Orange County. The intent
<br />of this Program is to provide an alternative funding option to small, local companies that are
<br />unable to obtain commercial funding, but meet the requirements of the Program loan fund.
<br />Orange County's original funding commitment to the Program was for $150,000 to cover the loan
<br />loss reserve of the original loan pool. After several modifications to the Program structure, on
<br />March 13, 2007 the Orange County Board of County Commissioners (BOCC) unanimously
<br />approved the transfer of $75,000 from the Program loan loss reserve account to the Orange
<br />County Small Business Loan Company (Company) to fund this mission. Also at this meeting, the
<br />BOCC approved transfer of an additional $75,000 to the Company so that the full $150,000
<br />originally committed to the Program was available for lending to small businesses in the County.
<br />At their March 10, 2009 meeting, the Program Board of Directors unanimously agreed to issue
<br />the first loan under the Program, in the amount of $50,000. The recipient of this loan is a small
<br />start-up service firm offering commercial janitorial and disaster restoration services. The
<br />company is based in Hillsborough, with its four primary employees also Orange County residents.
<br />The company also provides part-time employment to area residents according to work load
<br />requirements. Since its infusion of cash, the company has been able to secure several large
<br />contracts and used the funds to purchase additional equipment. To date, all payments have either
<br />been on time or received early, and most payments have included additional principal.
<br />On Friday, September 18, 2009, the Program Board of Directors voted to award the remaining
<br />$25,000 in Program funds to a toy start-up company based in Hillsborough. This entrepreneurial
<br />company is the designer, importer and marketer of the Pocket DISCTM, an indoor/outdoor flying
<br />disc. All Pocket DISCSTM are hand-made of 100% cotton. One of the company's goals is to
<br />support third world artisans, so the Pocket Disc is imported from Guatemala, based on fair trade
<br />practices. This applicant is seeking additional external funding to build its inventory and secure
<br />its supply chain, hire additional sales talent, and extend and focus its marketing efforts. The
<br />company currently has three employees at its Orange County location, and intends to use the
<br />funds for at least one additional hire.
<br />With these two loan awards, the Program is up and running as it was designed -supporting the
<br />small, entrepreneurial start ups of Orange County that meet the Program's loan guidelines. Due
<br />to the success of the program, the two loan awards over the past few months have utilized the
<br />entirety of the initial $75,000 funding.
<br />At the March 13, 2007 BOCC meeting, it was requested that the County grant the remaining
<br />$75,000 to restore the full $150,000 loan fund. However, during 2008-2009 budget cycle,
<br />because the Program had not yet utilized its first $75,000, the remaining $75,000 was not
<br />included as a budget request.
<br />As you can see by the Program's recent activity, the current economy has made this program
<br />very much in demand. At this time we request that the remainder of the original $150,000, that
<br />was unanimously committed to the Program at the March 13, 2007 BOCC meeting, be made
<br />available for future Orange County loans. The Orange County Small Business Loan Program will
<br />utilize the requested $75,000 to continue to serve small business owners in need of capital for
<br />growth in Orange County.
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