Dakota along with Garret has been working on the idea to launch a product since past three years. When they saw a patent pending product that had huge sales; they decided to launch their product.
Finally when they launched their Action Glow LED kit that can be used along with sports equipments, it comes with ten types of utilities ranges from bicycle to canoes, can be used for surfboards, skis and so on. With the launch of their product, these young brothers became busy with their business competitions and meetings.
Last year, after they started and upgraded their website, it was busier than ever since being the Christmas season. Things happened to be on tight schedules for them
Garret, vice president of Parallel Lighting (16 years) said “When Christmas season started we are in need of more stocks”. Dakota is the president of the company in Traverse City.
With the deficiency of enough funds in their business, especially during peak season, the brothers took loan from small business loan program that was initiated by ‘Traverse City Area Chamber of Commerce’. They availed a long of $2,500, which was enough to pay for equipments, stock and to pay for their suppliers. At Acme workshop, it was then easy for them to ramp up assembly.
This type of Sub Micro Loan program is a good relief to such small business entrepreneurs. Porters believe that it is a boon in the business-financing sector. If the loan wasn’t there, our deliveries will be delayed and we would have made people to wait for long time. Our Christmas sales would have been deeply affected and reduced. Now things are in a better shape” told Garret.
Small Loans to Big Success
In 2013, Traverse City Area Chamber Fundation along with the Fifth 3rd bank introduced loan facilities for small business or start up companies, who are looking for funding and capital investments or other operational needs. This type of loan differs from the traditional lending methods.
As per the program, loans of $7,500 to a maximum limit can be given for a short term. This type of short term loan has the payback period of 6 to 24 months with the interest rate of 8-12%.
According to Laura Galbraith, V.P of the Chamber, the loan program is a success as its demand is stable every month, getting at least three loan applications. By the mid of November, there were about 12 loans sanctioned and it comes around $80,000.
Salvador Montes, the owner of Rey Exports dealing with animal hides is one of the latest loan applicants in this loan program. The company needed loan for buying animal hides all over Northern Michigan and then sell it for manufacturing leather products like shoes to Mexico.
According to Galbraith, the program is socially relevant as its supports and fulfills the need of community. Due to which, no more than 40 job opportunities were provided to people in the city. Moreover, the program goes on with no defaults and borrower issues. Both eth authorities of the loan program, invested the capital amount of $50,000 each for fund revolving.
In the view point of Shooltz, “the loan program has been a great success and exceeded the expected growth. The job opportunities it gives, good record of accomplishment of payment history etc are some of the relevant growing ingredients for this program. Through its continuous support, many people are now getting enough funds to push their businesses ahead. This looks rewarding”.
Considering another interesting story of Debra Caperton, the whole business growth was like a ladder, Dabber was a former teacher and a single mom, who in 2010, launched her dream business to work for the betterment of teachers and help their to have better lives. She started with SOS lab , wherein the children with special needs as well as adults were given behavioral strategies, skills, academic support and other personal development programs.
For Capeton, the president of SOS, the business success came through her one client once strategy. With eth support of enough business funding, she gave enough job opportunities for other women and expanded her business operations to new location. Sub Micro Loan Program was the real help for her as she got $7,500 towards her loan. This was enough for her to functions her lab, increase business requirements etc.
She applied to the Sub Micro Loan program and received $7,500, enough to equip and open a lab in leased space and provide a comfortable “environment that people can come into,” said Caperton, SOS president.
Caperton said that her business got a new dimensions through this loan program. Moreover, she could also initiate a new business plan with the support of counselor from SBDC. She says “Now my ducks are in proper row and not worried about how to deal things comes up in my way.”
According to Galbraith, the loan facility is a true help for people looking for different fund sources. Some people may buy goods and build stocks or others may use to pay franchisee fees. The needs are different however. The best part is that according to her is the turnaround time for loan revision or provide funds. With less TAT, it comes to real aid for people in their urgencies.
The loan process is simple and the entrepreneurs are supposed to fill the applications and provide their details about tax returns and financial records and business plan. The underwriter verifies it and forward to the loan committee, there the potential business deal is assessed. To review their financial plan, revenue details, credit score, loan repay capacity etc, the entrepreneurs are supposed to meet SBDC Champer partner .
Galbraith says “the whole process finishes just in a week. Our attempt is on to fasten the whole process”
For Jim Harper, things were on Chaos when critically needed some fund to support his business, which is about aiding people with mental disabilities. All his focus was to help them to lead an individual lives. In October, 2011, when Jim started specialized personal recovery services. He had to hire employees and there were huge cash flow issues. He had to deal to weekly payroll but the services were paid only after 30-90 days. This financial constraint made Jim to go through financial difficulties.
Harper said “This payroll issue swallowed all my retirement funds”
He used to get the reimbursements slowly and it gave serious issue to several contracts he made, which later ended up just like that. The thing was that he somehow needed money to support all these issues. However, with low credit score, bank loand facilities were available when he approached his own previous bank, where he was an employee before.
Switching to Sub Micro Loan Program has been a real boon for him as he got the required funds $7,500 immediately. For Harper, it was like a god’s gift, he could meet all his dues, and easily deal with the payroll till his reimbursements from services came.
Harper said “If this loan wasn’t there, honestly I don’t think I could reach this position in the business where I am today. For me, it offered huge saving possibilities along with a good cash flow, which was something I lacked.”