When Norwalk CEO Roger Brouard wanted to borrow money for his company earlier this year, he experienced firsthand how difficult the economic climate has become. Brouard is founder of Veto Pro Pac, a manufacturer of high-quality tool bags for professional tradesmen. Despite healthy growth, strong sales and a loyal following in all 50 states, he still faced exceedingly high interest rates when he sought capital.
Brouard contacted the office of Gov. M. Jodi Rell, and her staff sent him to the nonprofit of which I am president, the Community Economic Development Fund (CEDF). We lent his company money at rates closer to Earth — less than 9 percent.
Brouard’s dilemma is shared by hundreds of Connecticut businesses amidst the most challenging economic times in memory. Like sailors weathering heavy seas, company owners need to utilize every resource they have to stay afloat and should consider turning to nontraditional sources of capital like CEDF.
In the last six weeks, we’ve lent $1.5 million to existing businesses and have several million more dollars to loan. More than 60 percent of our loans go to women and minorities, most of them low- to moderate-income.
One reason that we have money to lend is because of our sources of capital. Since 1994, our money has come largely from the private sector, primarily banks which have invested in our revolving loan fund, which have leveraged state matching funds. It’s how we’ve helped to create more than 3,500 jobs since CEDF started.
But it will take more than just borrowing money for many companies to survive when 7,000 Connecticut businesses have closed in the last six months. Support during times like these is critical. We don’t lend money without offering many ways to shore up businesses. At the same time, businesses don’t have to borrow money from us to take advantage of that support; our doors are open to any Connecticut company.
We offer legal workshops and hands-on financial training courses at minimal cost for owners of existing businesses to help them learn new skills and retool old ones. The workshops will be taught at night this fall in six different areas of the state and include topics such as understanding business financials, utilizing the business accounting software, Quickbooks, with a copy of the computer software included, and six different legal topics.
Any owner can take the courses, but CEDF borrowers get a discount on the cost and a reduced interest rate on their loans.
Our staff counselors meet with owners regularly to see how business is going. So when Shirley Clements, one of our borrowers and the owner of Healthy Harvest in Meriden, wanted to expand her health food store to include take-out lunches, a CEDF staff member visited her and helped with a plan. Her take-out business is doing just fine.
And when a personal trainer, Ray Boyd, decided last year that he wanted to open his own gym (The Training Floor) in Stamford, we lent him the money and assigned him a staff member, Shelly Koehler, with whom he consults regularly. “Any type of major decisions I think about, I run by her,” Boyd said July 22.
Although he had majored in business in college, Boyd enrolled in Quickbooks training to become familiar with the computer software he needed. Boyd has hired more trainers to keep up with demand at his gym.
We know that every story, especially now, isn’t experiencing a happy ending, and every business needs all the help it can get. That means turning to nontraditional lenders like CEDF for help, sooner rather than later.
Remember that old saying of the Marines: Hope is not a plan. If business owners wait too long to ask for help, it may be too late.
Businesses need to be in survival mode to get through the difficult economic times the nation and our state is experiencing. But hard as it is to imagine right now, someday prosperity will return.
CEDF will do its part to ensure that as many businesses as possible will make it to enjoy the good times that, we hope, are not too far in the future.
Donna Wertenbach is president and CEO of the Community Economic Development Fund, www.cedf.com. For help, businesses should call CEDF at (20)235-2333 or e-mail Donna at d.wertenbach@cedf.com.
