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Catalyst Loan Fund Supports Small Business

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Funding can be a challenge for small businesses, but thanks to the Howard County Economic Development Authority’s (HCEDA) Catalyst Loan Fund (CLF), there are options available to help them get off of the ground and grow.

“The Catalyst Loan Fund provides access to capital for small businesses that either may be too new to qualify for traditional bank financing or that have a gap in their financing,” said Beth Woodring, Catalyst Loan Fund manager at the HCEDA.

Composed of two different pools of funds, the CLF can provide loans up to $250,000 for businesses across the state for typical needs, such as equipment, working capital, tenant improvements, hiring staff, real estate and more.

“Studies have shown that small business lending is most successfully done at the local level, where the lender can establish a relationship with the borrowing business,” said Woodring. “This also benefits the borrower, because as the business grows, the local economic development office can provide additional support appropriate for the next stage of business — whether it is technical assistance, guidance through the proper steps of an expansion, workforce development or networking opportunities.”

Using proceeds from a catalyst loan, The Children’s SPOT Inc. relocated into its new, expanded location at 8815 Columbia 100 Parkway in May. The company provides speech, occupational and Applied Behavior Analysis therapy services to children and adolescents.

“The Children’s SPOT Inc. has benefited greatly from funding supplied by the Catalyst VLT loan,” said Co-Owner and Therapist Nicole “Nikki” Orellana. “The funds went a long way in helping to provide an optimal learning environment for our clients, to include a sensory room that offers opportunities for visual, tactile, olfactory and auditory stimulation. Given the cost of the equipment and training, this room would not have been possible without the loan.”

Since its move, The Children’s SPOT has added more therapists and equipment, and new therapy services that the company lacked the space for in its prior location.

Therapeutic & Recreational Riding Center Inc. (TRRC), in Glenwood, received a loan from the Catalyst Fund in 2014. Founded in 1983, the organization provides therapeutic physical services on horseback, called hippotherapy, through licensed therapists.

“TRRC obtained funding for an additional canopied fire exit with specialized custom lighting for the visually-challenged from Ronald McDonald House Children’s Charities of Baltimore, but TRRC did not have a building to attach this most generous gesture,” said Dr. Helen Tuel, executive director of TRRC. “Enter [the] Catalyst Fund to assist with the construction of an addition to the restored and repurposed historic bank barn, [which is] now an educational/conference component.”

Quality-Oriented Solutions Inc. (QOSI), an information technology firm and resident at the Maryland Center for Entrepreneurship (MCE), received a CLF loan earlier this year to fund the hiring of additional employees after the company won two new contracts for software testing. In business less than two years at the time of application, QOSI would not have met the “time in operations” requirement that most conventional banks would require.

“Having access to funding through the Catalyst Fund was important to our ability to bring on new staff,” said Daniel Olatunde, owner of QOSI.

All funding is in the form of loans, which are repaid with interest. The maximum loan term is five years, and interest rates vary, based upon credit risk. Processing time varies by deal, but the key to quick processing is a complete, accurate data package.

“Incomplete applications, together with lack of disclosure of credit issues, are the two largest hurdles to getting a deal done,” said Woodring.

The application process is simple and straightforward, and all the required forms are available to download from www.hceda.org/catalyst.