The topic of creating a micro lending program through the Staples Economic Development Authority (SEDA) was debated by the SEDA board of directors at their Feb. 23 session.

Various pros and cons of a program making small loans for business development were discussed between board members, their executive, director Jerel Nelsen, and Lee Miller, economic development director with the Region 5 Development Commission.

Miller described a federal funding program that provides funds to local economic development groups for a micro lending program. Micro lending programs might make loans for small amounts, with Miller using from $500 to $2,000 as a possible guideline.

One of the major requirements of the federal program is repayment of all the original principal, Miller pointed out.

That chilled some of the local EDA members, who were worried about loans defaulting. Miller noted there is a very successful micro lending program active in northeastern Minnesota that has loaned over $13 million in small loans and has a very low default rate.

Stan Carlson had difficulty with the general idea. He felt a $1,000 loan would not be worth the trouble in paperwork and staff time, even with interest being charged.

A very possible example of someone needing a small amount, Miller said, could be “someone with a product, but no way or no funds to market it.”

Carlson replied he was

afraid this type of loan “would consume our staff

time and a 3M type of company would come in and be lost” due to working on the small loan.

There has been one request for such a loan, Jerel Nelsen told the SEDA, in recent months from the Staples community.

Mayor Chris Etzler recalled how he had several years ago gotten involved in starting a small business but needed computers and office equipment. He needed about $3,200 to make those purchases but was unable to find anyone willing to make a loan. “I borrowed it from my folks,” he said, adding that he was not involved in that venture for long due to other employment offers.

For the second time in the past three months, the idea received no action. Miller and Nelsen are to try to come up with more defi- nite loan guidelines, especially a minimum amount.

The Farmers Market request for a location to build a permanent shelter and sales pavilion was discussed briefly. The EDA group looked at potential locations along Highway 10 near the Highway 210 intersection. Since no one from the Farmers Market group was present, there was no action.

Nelsen reported personnel from Northway Construction Management services investigated the excess moisture problem in the EDA’s Staples Industrial Building. They found the moisture was isolated in insulation above Unit B housing the Accura Tool Company and was confi ned to just one side of the building. It was apparently not a ventilation problem as much as a condensation issue caused by a warm shop and an air space above the insulation. It is thought the problem can be rectified by replacing the fiberglass insulation with a sprayed-on type of insulation.

In other matters, the EDA board:

o HEARD Nelsen report additional interest fromdowntown owners in the city’s awning and facade loan program as this summer downtown street project nears.

o LEARNED that the loan package the EDA approved for PCM Products a month ago is moving along, but not yet completed. The bulk of

the package was through a

bank loan. Nelsen reported, “The commercial lending

market right now is very tough.”

o LEARNED from Nelsen that he had a conversation with officials from the Ernie’s Food Market. He said the Staple Food Corporation will likely be giving the city a tax abatement request on their new store in the near future.

o HEARD Nelsen report he is working on drainage concerns involving the Ernie’s property, state owned land and ponds and the Staples Veterinary Clinic, all at the east end of the new Highway 10 area of Staples.