Optimism about the northern Nevada economy positively bubbles among microentrepreneurs, the folks who start the tiniest of businesses.
The Nevada Microenterprise Initiative, a Reno-based organization that helps finance companies too small to get bank loans,wrote about $250,000 in new loans in the fourth quarter of last year, and it closed nine loans in December alone.
That may not look like a lot of lending activity, but the Nevada Microenterprise Initiative makes no loans greater than $35,000, and a good part of its business is loans of $5,000 or so to get tiny companies started.
Its total loan portfolio $1.2 million includes lots of little loans.
"For them, $5,000 makes all the difference whether they are viable," says Deborah Prout, executive director of the nonprofit lender.
A couple of factors appear to be driving the enthusiasm of the microenterprise segment of the economy.
On one hand, Prout said, lots of folks are taking advantage of the booming local economy particularly in construction to strike out on their own.
A fellow who's driving a water truck for a contractor, for instance, may seek financing to buy his own truck so he can be a subcontractor rather than an employee.
Even more little businesses are created, Prout said, as refugees from the corporate world establish their own businesses.
Those companies range from offices of health-care professionals to retail establishments launched by people who are weary of the corporate grind.
"We're not lacking for loan candidates," Prout says."I would like to think this speaks for the energy and ferment in the microenterprise segment of the business community."
Many applicants, she said, have undertaken fairly sophisticated analysis of their potential market on their own, although the Nevada Microenterprise Initiative offers classes to help determine whether a business is feasible and classes in business-plan writing.
(Orientation for the next feasibility class is Jan.
25; call the initiative at 324-1812 for details.)
Applicants for microenterprise initiative loans are strongly optimistic about their region's future.
"The people I see are very high on the Reno-Sparks area," Prout says.
At the same time that it's handling more requests for loans, the Nevada Microenterprise Initiative is getting tougher about making certain that its loans are repaid.
"We've become more aggressive.We don't want people to think that we're a grant program," Prout says.
The funds loaned by the Nevada Microenterprise Initiative come from the Small Business Administration as well as contributions from financial institutions in the state.
Those funds are recycled into new loans as they're paid off, and Prout says rising real estate prices have accelerated the repayment from some microentrepreneurs.
If they own their homes, she says, some of the program's borrowers refinanced their mortgages against higher real estate values to pay off their business loan.
