As of Tuesday, October 3, 2017
OMAK A county-wide lending network for businesses looking for private financing could be started if there’s interest and someone willing to coordinate the project.
Trevor Lane, who works for Washington State University Extension in Ferry County, briefed members of The Economic Alliance on Local Investment Opportunity Networks during a Sept. 27 meeting at the Koala Street Grill.
“It’s all about access to money,” he said.
Through the program, known as LION, small businesses can get access to capital through private investors rather than a bank.
Seven sites around the state participate in LION, including a group in the Methow Valley.
“We have a dedicated group of investors,” said Rich Watson with the Winthrop Chamber of Commerce. It’s going well. We’d like to be bigger. We have more investors than borrowers.”
Lane said a local “champion,” or manager, is needed to coordinate the program. That person or organization would put out feelers to investors and then “get investors in a room with the person needing money.”
LION programs can be done by county, region or community.
If there are people willing to participate, they would “have to come to the table,” said Economic Alliance Executive Director Roni Holder-Diefenbach. “Our challenge is to find investors.”
LION is a fairly new program, with the oldest – in Port Townsend – being two or three years old, Lane said.
George Brady, Pateros, asked about interest rates charged.
That would negotiated between the borrower and the lender, Lane said. Typically it’s comparable to a bank rate, or around 1-3 percent.
“It’s kind of like ‘Shark Tank,’” said Holder-Diefenbach, referring to the television show in which aspiring entrepreneur contestants make presentations to a panel of investors, who then decide whether to invest.
LION founder Jordan Tampien, also of WSU, “found ways around SEC regulations,” said Economic Alliance board President Kurt Danison. “He got investment folks on board. It is a niche (banks) don’t want to serve.”
For higher-risk, or non-traditional businesses, the network can provide a good service, said Holder-Diefenbach. She said the North Central Washington Business Loan Fund used to offer loans to such clients, but it no longer is available.
The loan fund recently merged with Portland, Ore.-based Craft3.
Lane said he’s not heard of any defaults so far.
Lael Duncan, executive director of Okanogan County Community Action, said business clients should take a basic financial course, a “so you want to start a business-type class.” She also cautioned that borrowers “need to be careful of people who want to loan you money privately.”
Holder-Diefenbach suggested the alliance try to gauge how many people would be interested in the LION program.