Oswego business owners discuss loan programs

Oswego’s Office of Community Development meets with the city’s small business owners every week in hopes of spurring commercial growth downtown through microenterprise loans.

The group of Community Development leaders and business owners holds an Oswego Network of Entrepreneurs (ONE) meeting at 8 a.m. on the first, second and fourth Wednesday of every month in different business locations across Oswego.

At their most recent meeting on March 3, Mary Vanouse and Linda Goodness, the director and assistant director of the city’s Office of Community Development, respectively, along with six other small business owners, discussed creating a downtown business district. If that district were established, one option is that property owners would see an increase in their land tax downtown to pay for development programs in the district.

Small business owners in the group cited resistance from city government and hesitant downtown commercial landlords as obstacles to the idea.

"We know we’re not dealing with real out of the box thinkers here," Goodness said.

But Allen Bjorkman, president of the H. Lee White Marine Museum, said cities with designated business districts had an upper leg when applying for grant money because of the ability to draft and present coherent development plans. He added that the cost of declaring a business district would be very minimal for those in the city of Oswego.

"When the money becomes available, we should be ready," Bjorkman said.

In previous meetings the group discussed its microenterprise loan program, meant to revitalize the downtown Oswego commercial area.
Through that program, small loans are given to local entrepreneurs who wish to start or expand their businesses. First, however, the business owners must complete a 24-hour microenterprise course through Oswego State’s Small Business Development Center.

Entrepreneurs can be lent up to $25,000 through the program; that cap has increased since last year, when it was only $15,000. On the other hand, some prospective business owners ask for as little as $700 just to get off the ground, Goodness said.

Microenterprise loans are given at a three to four percent fixed interest rate and must be paid off in seven years. The amount received by each entrepreneur in the microenterprise program is tied to the number of jobs they intend to create, Goodness said, though she added that even a business that employs only its owner is eligible to be given a loan.

Several of the business owners around the table were graduates of the loan program, including Muriel Medina, owner of Que Colores!, a fair-trade Guatemalan handcrafts business at 193 W. First St. Medina said she was only able to start her business because of a microenterprise loan she had received.

"I had not had a store before, so the whole retail world was new to me," Medina said. "I found the class very, very helpful. Not only the training, but also the networking with other business owners who were also in the training, as well as the very realistic feedback on your business idea."
Medina’s story is becoming more common because of the current economic downturn. The credit crunch associated with the recession means that fewer and fewer entrepreneurs are getting approved for loans to start or expand their businesses from commercial lenders.

"I have 13 deals sitting on my desk right now and probably three will get approved," said Thomas Cesta, vice president of commercial banking for HSBC in Watertown. "Most things that are being approved are enhancements to other transactions, shifting the risk."

Goodness said that the Office of Community Development looks for collateral when it makes microenterprise loans, but that it is more forgiving of credit history than commercial banks usually are.

"Our lending policies are set, but they’re flexible," Goodness said. "The microenterprise program, during times of unemployment, unfortunately, really takes off. During times of employment, people go off, to work but they have ideas of what they would rather be doing. When they get laid off, they start to think about how they can implement those ideas for themselves… The attitude is, ‘I have to do something.’"

That flexibility and willingness to forgive are driving more and more small business owners to take advantage of the program. The microenterprise class on Feb. 13 had 27 enrolled entrepreneurs, compared to only 13 this same time last year.

"It’s a great feeder program for all of our local businesses," Vanouse said.

The next ONE meeting will be held Wednesday March 10 at 8 a.m. in the basement of the HSBC bank at 100 E. 1st St.