OGDEN -- The city is proposing a change to its five-year plan that includes an amendment to help new small-business owners.
The city's five-year consolidated plan includes a proposal to create a Community Development Block Grant-funded "loan loss" program aimed at promoting business development by leveraging grants to secure loans from larger loan pools that could then be given to small businesses.
City officials say the loan program is needed to provide otherwise viable small businesses with loan options when traditional loan and investment opportunities aren't available.
Glenn Symes, a policy analyst for the Ogden City Council, said some new small businesses can have a difficult time securing loans and funding for expansion, investment and operating capital.
"A lot of times, you will have a small business with a really great idea or a great product, but they can't get traditional financing," Symes said. "This program would help them out."
Symes said the program would fill a "funding gap" that comes when a business is still so new it can't meet certain loan requirements. Filling that funding gap would allow the businesses time to grow and provide and retain jobs in the community.
The new program would use block grant loans to secure loans that would be issued by Ogden Reinvestment Corporation. An initial amount of $305,000 would come from the sale of six CDBG-funded small-business loans.
The funds would be used to provide a 10 percent security backing for loans issued by ORC to small businesses. The loan pool available to ORC contains $3 million and comes from the Ogden Industrial Development Corporation.
The goal of the program is to take the $305,000 initial investment and leverage that money to secure $3 million in loans that would then be available to the business community.
Justin Gumm, owner of Slackwater Pub and Pizzeria, said the program sounds like a good idea. Gumm and Krissann Smith opened Slackwater in June 2011, partly because of the help they received from the Weber State University Small Business Development Center and other Ogden city loan programs.
"I think anything the city can do to help small business thrive is great for the community," Gumm said. "It can be tough, especially today, to get the money you need to get a small business off of the ground."
The city is also proposing some changes to the 2012 annual Action Plan.
The plans are available for public review until March 16 at the Ogden City Municipal Building, 2549 Washington Blvd.