SBA 504 Economic Development Loan Creates Two New Female Entrepreneurs
From Employee to Ownership
The SBA 504 Loan Program ensured Quilt A Way employees kept their jobs, two women entrepreneurs were able to begin their journey, and Great Falls was able to retain a great local business for many more years to come.
“They were able to scrape together some money to put into the project, but it wasn’t enough for a traditional bank loan.” A familiar story for a lot of entrepreneurs.
Quilt A Way has been a fixture of the Great Falls community for over 20 years, offering quilting products, sewing machines and quilting classes to the quilters and sewers of central Montana. When its owners, Toni and Dennis Eckart, were ready to retire, Great Falls, Montana was at risk of losing four part-time jobs, one full-time job and a valued community resource. When two of Quilt A Way’s employees decided they wanted to buy the company they weren’t sure how to make it work. Patricia Sue Nelson and Annemarie Neiffer were the general manager and bookkeeper of Quilt A Way respectively. While both Patricia and Annemarie had worked in the quilting industry for years, they were new to owning and operating their own business. They were able to scrape together some money to put into the project, but it wasn’t enough for a traditional bank loan. A familiar story for a lot of entrepreneurs. Fortunately for Patricia and Annemarie they have a wonderful community banker, Teri Anderson at Stockman Bank, who knew about the products and services offered by High Plains Financial (HPF).
High Plains Financial is the sister CDC of the Great Falls Development Authority (GFDA), a 501 c(3) non-profit, public-private partnership with a mission to lead Great Falls economic development efforts to promote growth, diversification and the creation of high wage jobs. Utilizing revolving loan funds and SBA 504 loans, GFDA and HPF have a number of tools to provide entrepreneurs the financing they need to support the growth, creation, retention or expansion of local businesses. Noting the importance of retaining the jobs, and Quilt A Way’s unique product offering, the Great Falls Development Authority and High Plains Financial were excited to help in whatever way they could. The borrowers, banker and GFDA & HPF were able to sit down together and develop a plan to keep these resources from leaving their community.
Working together it was decided the SBA 504 program was going to be their best option to make this deal happen. The borrowers only had to make a 15% down payment and received a low, fixed interest rate on their loan for 20 years. The bank only had to put in 50% of the project costs while retaining a first position lien, substantially reducing their risk. GFDA was also able to use Community Development Block Grant Funds from the City of Great Falls to help finance ineligible 504 costs. These funds ensured Quilt A Way employees kept their jobs, two women entrepreneurs were able to begin their journey, and Great Falls was able to retain a great local business for many more years to come.
15% input from the entrepreneur
50% input from the bank
35% Low, fixed interest rate
SBA 504 Loan