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S.L. loans turn dreams into reality

Small-business owners can get up to $100,000

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Lara Kierstead couldn't pass up an opportunity that presented itself to her in more than one way.

She had been working on an in-home cooking service for about a year and a half, but because she could only serve one family each day, the business had reached its potential. She wanted to expand to a cafe, but the hassle was too great.

But when she ran into the owner of Dancing Cranes Imports, 673 E. Simpson Ave. (2240 South), which just happened to have a vacant cafe inside, the possibility became a probability.

Until she crunched the numbers. The graduate of the Culinary Institute of America found she needed about $100,000 more, in addition to the $20,000 from her chef business, to make the soup-and-sandwich shop a reality.

She could get only a $90,000 loan at 9 percent interest from the bank — not enough to keep her going through all the construction costs and menu-design meetings. Her accountant suggested she go to the city for one of its Small Business Revolving Loan Fund loans. She was a perfect candidate.

In April, she met Bob Gore from Salt Lake City Community and Economic Development, and at the City Council's July 10 meeting, her loan was approved; she anticipates opening her business by the end of September.

As part of Mayor Rocky Anderson's goal to revitalize the small-business economy of Salt Lake City, the Small Business Revolving Loan Fund underwent a bit of revitalization itself.

The fund hadn't been used for a few years until three months ago, when Frank McCrady and Gore rescued it.

"This is one of the ways we can reach out to small-business owners," said McCrady, deputy director of community and economic development. "We can bring revitalization efforts to areas that are currently underserved."

The fund provides loans of up to $100,000 to businesses looking to locate in such areas, McCrady said. The bulk of the loans, which are often in conjunction with personal capital and bank funds, go out to residents who already own businesses but are looking to expand in location and size. The criteria all center on the city's goal of providing local employment and services, McCrady said.

The loans are given out at a low interest rate, around 7 percent, and are paid back in about five years, McCrady said.

That's why Kierstead took advantage of the fund.

She'll use the $100,000 to fix up the kitchen equipment and add an office to the Singing Cricket Cafe.

"I'm looking forward to providing more jobs" to chefs and cashiers, Kierstead said. "It's a lunch spot in an area where there are no other sandwich shops."

Eric DeBonis also said the rate of the revolving loan fund attracted him. His third restaurant, The Paris, at 1500 East and 1500 South, is the first one that will be completely under his ownership. He's bringing in one-third of the money on his own, another third from a Small Business Administration loan and the last third from the city.

"That's the beauty of this whole thing," he said. "I did not have to go out and sell my soul to start this entity."

DeBonis said he plans to hire from around the neighborhood and wants to encourage residents to walk, not drive, there.

Unlike Kierstead and DeBonis, Mark Levey will not be leasing his third location for the Hijinks kite store. He'll own his space at 362 W. Pierpont Ave.

"It's a mixed urban area," he said. "It's unique."

Levey needed more space for the shipping and warehouse parts of his business, so he moved from a 500-square-foot Trolley Square locale to a new, 3,000-square-foot building after seeing a newsletter about the fund in his water bill.

Levey is using his $100,000 for signage, working capital and to purchase enough kites, games and toys to fill the newly acquired space. He also took out loans through the SBA and a local bank.

"I think what this does for us is it allows us to do a lot more with this location," he said.

The loan fund has had nine applications so far. Changes are in the works that will add to and expand the criteria over the next two months, McCrady said.

E-mail: lwhite@desnews.com