BOISE, Idaho—May 18, 2012—Bear River Electric, LLC, in Soda Springs, Idaho, added new employees and considerable growth thanks to the Collateral Support Program (CSP), a small-business economic development financing program administered by Idaho Housing and Finance Association (IHFA).

The CSP is helping Idaho small businesses such as Bear River Electric receive additional collateral support in the form of cash deposits that are administered by IHFA but made available through Idaho lending institutions. Co-owners Jeremiah Sears and Trevor Neal have been able to hire 15 new employees since receiving their loan, and the working capital has also enabled them to expand their opportunities to bid on projects—and to bid on larger ones.
 

Under the Small Business Jobs Act signed into law last fall, Idaho received $13.2 million in funds to increase lending to small businesses through partnerships with Idaho lending institutions. IHFA started accepting applications on November 28, 2011. To date, 37 applications have been received and 23 small businesses around the state have received collateral support funding from the program.
 

The collateral funds are pledged to the lender by IHFA for the benefit of the small business as security for their qualified loan. When the loan is paid back, the funds will be reinvested by IHFA to benefit new small business loans. The original $13.2 million allocation for Idaho is expected to support more than $130 million in new private lending in the state over the next five years.
 

According to Bear River Electric co-owner Trevor Neal, “My business partner, Jeremiah Sears, and I were so impressed at how quick and smooth this entire CSP process has been. Within less than 10 days of our banker, Paul Mendenhall with Ireland Bank, starting this process for us, we had our funding and were able to move forward with hiring 15 new employees (almost doubling the size of our organization!) and going after larger projects with our increased working capital. This was by far the best financial transaction we’ve had in the six years we’ve been in business.”
 

The loans can be used to cover a wide variety of purposes, such as start-up costs, working capital, and construction. Small business owners who employ 500 or fewer people who are authorized to conduct business in Idaho may qualify for the CSP.
 

The CSP is offered on a first-come, first-served basis to qualified Idaho small business borrowers. Loans must generally first meet all lenders’ credit underwriting criteria with the exception of the collateral shortfall, which is what the program covers. According to IHFA economic development finance officer Cory Phelps, “This partnership with Ireland Bank and its borrower is exactly what the program is intended for—ultimately helping small businesses in Idaho gain greater access to capital, which in turn allows them to grow and expand their enterprise. This collateral funding program is just one more tool they can use to give them the extra assurance needed to make credit available to small businesses who qualify except for a shortfall in collateral as a result of current market conditions. It’s a win-win situation for all involved.”
 

The program is a collaborative partnership among the U.S. Department of the Treasury, the Idaho Department of Commerce, Idaho Housing and Finance Association, and the Idaho Bankers Association. Small businesses interested in the CSP should contact their current lending institution first and ask about the program. If a lender is a CSP participant, it will apply to IHFA for a collateral support deposit on behalf of the small business. If a lender is not a program participant or is unaware of the program, please contact IHFA directly for a referral at coryp@ihfa.org, 208.331.4725, or visit the “Small Business Loan Programs” section at www.ihfa.org for more information.

 

-30-

Idaho Housing and Finance Association, a financial services and housing business organization, improves lives and strengthens Idaho communities by expanding housing opportunities, building self-sufficiency, and fostering economic development.