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Starting small — and growing

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Sam and Erica Liti plan to open a tanning salon. Across the table were Lilly Johnson and Daynen McCarthy, who want to get kilns, darkroom equipment and pottery wheels for a startup art school.

Nearby was a woman with an idea for an innovative baby blanket and people involved in family therapy services.

So why were people with such divergent interests in the same room? They were looking for money.

They came to the right place.

The dozen people were participating Wednesday in an orientation session to learn more about obtaining a loan from the Utah Microenterprise Loan Fund, starting down a path that could lead each to a potential sum of $10,000 to help their startup or existing businesses.

"We just got into it and the more we looked into it, the more we realized we needed the extra money to have working capital," said Erica Liti, readying the salon for a mid-September opening in West Valley City.

"We don't want to be four months into it and not have the money to make it work."

Johnson, also of West Valley, and McCarthy, of Taylorsville, want a loan for equipment and to boost marketing at their Continued Learning Art Specialty School, or CLASS, in Murray.

"Most of the loan facilities do large loans," McCarthy said. "We need $5,000 to $10,000. We really didn't want to do a loan — we've been working out-of-pocket — but if we get a loan, we can do marketing to get the word out, and that will bring in business, and from then on, we'll be flying."

The loan fund has helped lots of businesses take off since its inception in 1993, and the dozen people attending Wednesday's session demonstrated that interest in the program remains high among people without access to traditional funding sources.

The fund is designed for entrepreneurs with no track record, those with insufficient collateral and/or people with credit history issues.

The fund has helped a variety of entrepreneurs, including those involved in a Spanish newspaper, a retail bike shop, a dog grooming business, a mortgage loan broker, a day spa operator — even a belly dance instruction company.

"Sometimes people need extra capital to help the business along or just want to have their business provide some extra income," said Kathy J. Ricci, the fund's executive director. "It's not necessarily driven by the number of jobs or revenue growth it can create."

Ricci believes that with the number of bankruptcies climbing and the economy slowing, banks will tighten up their loan programs. That, she said, will help the loan fund remain attractive as a "lender of last resort," helping people who have stumbled through life-changing events such as bankruptcies or divorce and are looking to get back on their financial feet.

And help them with more than money. Business owners on the Credit Committee often interact with applicants, providing tips to help their ventures become a success.

Johnson noticed the personal touch Wednesday. "It's obvious that there is encouragement," she said. "They encourage you to come in and express ideas and if you have problem, they will help you work it out."

E-mail: bwallace@desnews.com