Surviving with help from SBA

COEUR d'ALENE - A California vintner, a pair of Yugoslavian entrepreneurs, a care facility for mentally and developmentally afflicted individuals, a fitness club, a restaurant and a hair salon all have at least one thing in common.

All are Kootenai County businesses who might well not exist without the benefits of guaranteed loans from the U.S. Small Business Administration and a local bank.

"Without the SBA and Mountain West Bank we wouldn't be here," said Karlo Marusic, partner with fellow former Yugoslavian Franjo Musa in Albatross UV.

Marusic came to the U.S. in 1994 and worked in construction and manufacturing before opening up Albatross in Coeur d'Alene in 2005. The company builds a variety of ultraviolet lamps for research, industrial and scientific applications, from microwaves to curing lamps and halide lights.

"We were leasing a smaller space," he said. "Business picked up a little bit and we ran out of space."

With help from the bank, which is the top SBA lender in the Northwest region, the company was able to purchase and renovate a new building and land in Post Falls.

"We have space to expand now," Marusic said.

He admits he is somewhat astonished that a business that employs 10, ranging from assembly workers to glass blowers and marketing and sales people, would even appear on the radar of the SBA or the press. But on Wednesday his was one of several visited by SBA administrators from Seattle, Spokane and Washington, D.C., along with representatives of Mountain West Bank who made a variety of loans through the agency.

"He is a very interesting person," said Ted Schinzel, Spokane branch manager of the SBA. "He is a genius."

But that is not an essential characteristic to get or need a loan to start or expand a small business, defined by the SBA as anything less than 500 employees.

Kelli Cordon and Anna Jessick got an SBA loan to expand Fratelli Salon to downtown Coeur d'Alene in the Parkside high-rise.

"They couldn't do a conventional loan," said Lynn Alexander, commercial lender for Mountain West. "She had to scramble. Her lease was expiring. She couldn't close the salon, because customers were on a schedule."

The process for getting a loan went smoothly, Cordon said.

"We didn't have to cut any hours," she said.

The Coeur d'Alene Athletic Club was among the private clubs that saw membership dwindle when the Kroc Center opened, but with an SBA loan managed to renovate under new ownership.

"A lot are returning from the Kroc," Alexander said.

Ed and Trish Baily Snider own Beau Vigne, a small Napa Valley, Calif., winery that has its offices in Hayden. An SBA loan allowed them to consolidate the credit card balances they ran up going into the wine business, and purchase and remodel a tasting room at the winery to move toward a more profitable retail focus, with the goal of reversing the 90/10 wholesale to retail ratio of sales.

"It allowed us to stay in Idaho," Ed said. "We are here because of the SBA program."

The tour of small businesses began at Harmony House in Hayden and finished up at Rosa's Italian Market and Deli in Post Falls. That operation got its start a year ago. Owner Tina-Marie Schultz opened up with help from SBA and a waiver of $7,000 in fees.

Graham Christensen, owner of two Harmony House assisted living centers, is building the third in Hayden with 16 rooms, with a $785,000 SBA loan. Under new rules, he saved $25,000 to $30,000 in what would have been up-front guarantee fees.

With the Idaho Department of Health and Welfare already postponing payments that are about 60 percent of private pay rates, and considering further cuts, that was a significant saving, Christensen said.

The SBA loan allowed construction plus furniture and fixtures, and he only has to pay interest until the construction is completed around the end of June.

"We would have to postpone it," because of the requirement for a 30 percent down payment, compared to 10 percent to 15 percent through SBA, he said.

Among those visiting the local operations was Esther Vassar, national ombudsman and assistant administrator for regulatory enforcement fairness for the SBA.

Here, as in other regions, the biggest concern of small business operators is maintaining their lifeline link to a line of credit as banks cut back their lending in the wake of regulations limiting their loan to asset ratios.

"Some are on the brink of falling off," she said.

But seeing businesses who are not just surviving, but thriving, improves her confidence for a positive turnaround in the economy.

"Nothing makes a nation happier or healthier than celebrating good news," she said.