By RACHEL CREE SHERMAN

In an ailing economy that otherwise might give budding entrepreneurs and seasoned business owners pause before proceeding with major investments, the experts in Vermont say, “Now is the time: go for it.”

There are myriad reasons why, most of them found through state, federal and private agencies that presently offer a wide range of counseling and financing alternatives.

The Vermont Small Business Development Center (SBDC) operates under the auspices of the Vermont Department of Economic Development. “Now’s a great time to start a business for someone who does their homework and puts the right package together,” said David Rubel, area business advisor for the SBDC.

“There are lots of opportunities out there – tremendous potential– whether you’re starting from scratch or with an acquisition; buying an existing business, franchise or expanding. . . .we have a very supportive state.”

Funding for commercial pursuits is available through loans on a comparatively immediate basis, backed by collateral or other forms of guaranteed repayment through any one of a number of alternative sources. Private institutions such as banks and credit unions and state and federal agencies are all lending funds, either directly or indirectly, some of them working in tandem. These institutions support businesses in the best way possible for the success of both the business owner and lender.

Entrepreneurs and business owners throughout Central Vermont can call on some of the same institutions as people throughout the rest of the state, as well as financial resources within the area.

The U.S. Small Business Association’s (SBA) programs, for instance, make commercial borrowing easier than it has been for a long time, with guarantees of up to 90 percent on loans and with waivers on associated fees, which can be substantial. The SBA is a federal agency that partially funds the SBDC, SCORE (Counselors to America’s Small Business) and the Vermont Women’s Business Center. Funds are available through Congress to provide services for businesses. Specialists can help in a variety of different areas.

The Community National Bank has offices in the Barre-Montpelier area and throughout the Northeast Kingdom. Tim Bronson, commercial loan officer at the bank’s headquarters in Derby, said though public opinion may hold otherwise, banks are continuing to help businesses and are invested in doing so.

“We know that some of our business people are finding it tough right now, so we try to set up a fee schedule” to accommodate their needs, Bronson said.

This is especially true with seasonal businesses such as farming, so that those businesses can pay only on the interest of the loan for a while. “Our business customers are tough, savvy and are getting through this,” he said.

Loans and financial support in the form of loan guarantees can be implemented through agencies via programs designed for just such purposes. In addition to the SBA, these agencies include the Vermont Economic Development Association, Community Capital of Vermont, the Vermont Community Loan Fund and the U.S. Department of Agriculture Rural Development program.

These agencies can provide loans to startup and existing businesses where working capital is not in place or needs to be supplemented, the agencies backing banks and credit unions in subordinate positions.

Institutions in Vermont offer no-cost consultations and affordable training for business owners – an imperative, common-sense preliminary step to success, according to Rubel and other experts.

“We don’t just send (business people) out the door,” Bronson said. “We’re trying to give them as much advice as we can so that they can stay in business. Right now, (due to SBA guarantees and fee waivers), it’s easier to expand, buy equipment, stay in business.”

While he said banks will take collateral, if it isn’t acceptable to the lender, the situation can be mitigated by guarantees by the government, resulting in less risk to the lending institution.

“There’s a lot of talk out there because of the stimulus packages, but it really comes down to starting with a bank for traditional financing,” Rubel said. “Every case and situation is unique.” Some banks have certain projects that they decline out of hand.

“Shop banks,” Rubel said. “Do homework. Meet with someone like us who can give advice for banks, prepare a business plan and financing proposal before submitting it to a lender.”

Success is worth the wait, said Rubel, and obtaining a clear understanding of the risks and rewards involved can make a difference.

“Hypothetically,” taking the necessary preliminary and cautionary steps “makes it easier for banks to leverage a guarantee and less expensive for a potential borrower,” he said.

In the event no bank will accept a lender, there are diverse ways of putting a package together. As previously stated, it is sometimes possible to bring a combination of lenders and subordinate institutions together to gather resources and draw capital for a business from several sources. Central Vermonters may also find assistance through the Central Vermont Economic Development Corporation.

The SBA provides loan guarantees to the small business community of up to $2 million with no minimum, according to Bernie Villemaire of the Montpelier SBA office. In Central Vermont, the office works with area financial institutions which include Union Bank, Chittenden Bank, Community National Bank, Northfield Savings Bank, Key Bank, TD Bank, Merchants Bank and Citizens Bank, as well as the Vermont State Employees Credit Union.

There are nine different SBA loan guaranty programs, from SBA-approved 7(a) loans to non-7(a) loans. The former include four different lender-approved loans, seasonal CAPLines – the umbrella program under which the SBA helps small businesses meet short-term and cyclical working-capital needs – or short-term/revolving lines of credit, international trade loans and the export working-capital program.

Non-7(a) loans include micro-loans which are available through nonprofit lending organizations and provide technical assistance and 504 loans provided through certified development companies.

VEDA offers direct loans that are currently assisted by a federal stimulus package; industrial revenue bonds; loan guarantees; and other state-supported and/or federally supported financing programs including the Vermont Agricultural Credit Corporation.

Another such agency is Community Capital of Vermont, a nonprofit loan fund dedicated to providing capital and business development services for the support of start-up businesses and the growth of micro and small businesses. Director Emily Kaminsky described the agency as one of the “most flexible lenders in regard to collateral.”

The agency also administers the Vermont Job Start Loan Fund, which provides up to $50,000 in business financing for income-eligible Vermonters with limited financial capabilities. In addition to the loan amount, all Community Capital borrowers receive a $1,500 grant for consultation purposes to support their businesses.

Vermont Community Loan Fund is a nonprofit community-development financial institution specializing in helping existing businesses to expand by offering flexible terms. Information is available through the Secretary of State’s new guide at www.startabusinessinvermont.net and through SBA brochures.

Again, timing is of the essence. There has seldom been a better year for a business to borrow money, generating economic activity for local communities and for the state.

However, all of the experts make one thing patently clear. Whatever the appropriate lending program may be, one fact stands alone: a good, solid business plan is the first priority toward achieving a successful loan agreement.