USDA-funded loan pool boosts Gardnerville businesses

Battle Born Wine has sold gift baskets during almost the entire five years that the store in downtown Gardnerville has been owned by Troy Phillips.

The problem: Despite the store's location on busy U.S. 395, passing consumers thought the store sold only wine.

Phillips drew on a low-interest loan program financed by the U.S. Department of Agriculture and managed by Main Street Gardnerville to boost his marketing better signage, new bags and solidify his inventories.

Today, the store sees steady growth of new customers.

Like many retailers, Phillips had found himself in a tight spot. Even modest marketing to increase consumers' awareness of his store's gift baskets not to mention its wide inventory of craft beers would chew a big hole in the store's cash flow.

And banks and other traditional lenders either don't want to make loans of a few thousand dollars or would require high interest.

The revolving loan program managed by Main Street Gardnerville, however, provides loans that carry a 2 percent interest with repayment spread over five to 10 years. Loans generally total $1,500 to $10,000, although they may go higher.

"This program was a neat way for us to get capital," says Phillips.

Main Street Gardnerville has made three loans through the USDA initiative and has another handful of proposals in the pipeline, says Paula Lochridge, who manages Main Street Gardnerville.

"We want our downtown to succeed," she says. "We have a lot of unique small businesses in our downtown, and we want them to have a fighting chance."

The revolving-loan fund totals $56,000. Loans are available for uses ranging from signs and awnings to working capital and additional staff.

An early success story of the program came at No Place Like Home Senior Care LLC.

Rick Ackerson, president and chief executive officer of the company, says No Place Like Home has grown five-fold since it used its loan funds in May 2011 to boost its working capital.

"It gave me a jump start," says Ackerson, noting that the 2 percent interest rate means that the loan didn't create a serious financial burden on the growing company.

The interest rate proved to be a key ingredient to build momentum for the loan program after it drew lukewarm response when it was introduced in 2009, says Lochridge.

She says the first version of the program called for loans to carry a 4 percent interest rate. That was daunting to borrowers, particularly because they were nervous in those early days of the recession that had begun in 2008.

Potential borrowers also were worried about confidentiality as they were required to provide detailed financial information.

Applications today are reviewed by a loan committee of financial professionals in Douglas County who understand the need for confidentiality, Lochridge says. Neither the staff nor the board of the nonprofit Main Street Gardnerville has access to the information.

"It stays very confidential," says Lochridge.

Borrowers must be members of Main Street Gardnerville and located within the Main Street District.

(Main Street Gardnerville, one of 40 Main Street programs nationwide overseen by the National Trust for Historic Preservation, is the only program of its type in Nevada. Its goal is preservation and revitalization of historic downtown districts.)

Michelle Kelly, business program specialist with USDA in Carson City, says the Main Street Gardnerville revolving-loan fund is one of several lending vehicles that the federal agency has established in rural areas of the state.

"In the current lending environment, there is a great demand for it," Kelly says.