A new loan for a new production company in the Staples Industrial Building was approved Jan. 26 at the monthly meeting of the Staples Economic Development Authority (SEDA).

The PCM Products company owned by Bill Paulson has been located in the SEDA Industrial Building for most of the past year, with orders for the company’s specialty ag products and other custom molded rubber parts coming in so steadily he cannot handle them with current equipment and operating capital.

The EDA board approved Executive Director Jerel Nelsen’s recommendation to provide a $50,000 contribution to a total loan package of $300,000, which will have a 90 percent Small Business Administration guarantee. Nelsen said all five partners in the loan package will have a shared first position on the loan, which will be at 8 percent interest for ten years. Partners and the amounts they will provide are Unity Bank $140,000; Staples EDA $50,000; Initiative Foundation (Little Falls) $50,000; North Central EDA (Region 5) $30,000 and Todd-Wadena Electric $30,000. Previous smaller loans from SEDA and some of the other lenders to Paulson will be paid off as part of this financ- ing package, Nelsen also said.

Paulson has transferred all of his production from his startup location at Menahga to Staples. PCM makes a variety of ag products, including a rubber flail used to knock dirt off beets in the harvesting process. His business is about 75 percent ag products, with the remainder recreational and other items.

Paulson told a loan committee of all the lenders that PCM is experiencing current cash flow problems with orders coming in, materials are ordered, products manufactured and shipped, then he has to wait for payment, then pay his suppliers and start the process all over. He told the lenders he will use the loan proceeds to pay off his other loans, complete purchase of Harvest Components equipment and assets, pay off the remaining amount he owes on one large press and be able to purchase two smaller hydraulic units, plus have the working capital he needs to operate. Paulson was formerly associated with Harvest Components, an existing ag products firm located in the former Stanley Widmer building in the Staples Industrial Park.

Paulson projected that his 2010 gross sales with the loan will be more than double what he could handle without the new equipment and operating capital.

In other business at the January EDA meeting, the EDA board:

o APPROVED two awning and facade loans to Andre Sebasky for his two houses, located at 121 Sixth Street N.E. and 117 Sixth Street N.E. The loans are part of the Small Cities Development Program grant for the downtown area. In addition to the awnings and facade loans, additional SCDP funds will be used for improvements to windows, doors, siding, window trim and other items.

o AGREED, on a 3-1 vote, to release their collateral position on movie inventory with Jolleen Yungbauer’s Movie Palace business.

o DISCUSSED a possible location for a Farmers Market permanent structure on land adjacent to Highway 10. The local Farmers Market group is looking for a place to build a sales pavilion alongside the highway. The narrow finger of land on the south side of Highway 10 and a block east of the Highway 10 and 210 intersection is one site they discussed.

o DISCUSSED other items, including a moisture problem with parts of the city’s Industrial building, progress on both a marketing task force and the city’s broadband initiative. Nelsen said they had learned this month that the city’s broadband grant application had been denied, but the local broadband group is still looking for a funding source.