Gap financing can make the difference in pursuing success
By Terry Lehrke, News Editor
Community Development of Morrison County doesn’t “give” money away — but with low interest gap financing — it may seem that way to some. However, all the funds expended come back, with interest, to be used again by another business.
And helping businesses with that gap financing is what Carol Anderson, the director of Community Development of Morrison County (CDMC), does every day.
The business may be an existing one that needs to expand; or it may be a business looking to locate or start up in Morrison County.
Either way, a call to Anderson is one of the first a business may want to make.
CDMC has worked with 55 loans since 1997, said Anderson. “They’ve been paid off, and we made new ones. Some are bigger and some are smaller. We can do manufacturing (loans), retail, we can do nonprofits. And when I say nonprofits, I mean like Horizon Health, to help with one of their facilities, or Productive Alternatives to help with their building or equipment.”
Anderson said nonprofits have a hard time getting bank financing even in good times, because the banks don’t necessarily want to lend to nonprofits.
“So nonprofits come in with their bank representatives and we work with them. They employ quite a few people,” said Anderson. “And that’s what we want to do — help people get jobs. That’s the whole purpose.”
CDMC was started more than 50 years ago, as a committee of the Chamber of Commerce, said Anderson.
Then it grew to become Community Development of Little Falls.
“And then it grew to include all of Morrison County about 1985,” said Anderson. “Long before I came.”
Anderson came along in 1989 and has been working with Community Development ever since.
“We had one loan fund — about $200,000 — and we’ve built that up now that we’ve got five loan funds, of over $2 million,” she said. A lot of that is loaned out and working for area businesses.
Many of CDMC’s loans come through various areas of the United States Department of Agriculture (USDA). Some of the funds are made available to rural communities, those with a population of fewer than 50,000 people.
The organization does not take the place of a bank loan, sometimes it is the funding CDMC and its partners offer that makes bank financing possible.
“Community Development offers gap financing, not complete financing,” said Anderson. “We’re not to be there to take the place of the bank —we’re there to work in partnership with the bank.”
Just ask Tom Elbert who purchased the former Crest-liner building from Brunswick a year ago, after the boat manufacturing operation was moved out of Little Falls.
He said Community Development, along with the city of Little Falls, made the deal happen. Now, the Little Falls Manufacturing Development Center is half filled with other businesses.
Anderson remembers Elbert came to visit her in July 2010, and thought financing wouldn’t be a problem.
“He found out the banking world had changed and he was $400,000 short,” she said. “We put that deal together (with the city of Little Falls) in 30 days.”
CDMC doesn’t work alone, because Anderson works not only with its loan funds, but with partners it has with cities and other entities.
“It’s taken off and done well,” said Anderson. A year later, Elbert was able to pay back half of what he owed the city of Little Falls early.
One of Anderson’s favorite success stories with a quick turn around was the financing package put together for Larson Boats in early 2010.
“We can turn it around really quickly,” she said. “What we did for Larson Boats — I’ll never forget it. I met with Irwin Jacobs Dec. 4 (2009), and he said ‘What have you got that you can help with.’ I had been kind of talking to my various groups, and I said, well, we can do $1 million.”
When Anderson got all the groups together with Irwin Jacobs, owner of Larson Boats, it was a bit more than that.
“We ended up with $1.8 million — and this had never happened before — all five of the groups agreed Jan. 27, (2010) the same day Mike Doucette died. Then we closed it on Feb. 10 (2010).”
She said, “That’s never happened before either — $1.8 million in two months — unbelievable, and we did that.”
Jacobs remembered and came back to her with another proposal.
“Then Irwin comes around again and he said, ‘Well I’ll move Triumph Boats here, but need $2 million to build a building, bring equipment down, so where do I go for that?’”
Anderson said she went to other programs in the USDA and went to the state for funds available there.
“We just closed last week — the last $.5 million dollars. That was a $2 million project,” she said.
But what’s better is what will happen with the money. “As it gets paid back, we get to keep it as loan fund to help other businesses. We did that with Larson Boats from the start. So now the city has another $.5 million that they can use to help. That’s just a an add-on to what we have already.”
She said it’s a unique thing, that the loans are replenished and they are paid back and that money gets used to help other businesses.
In addition, businesses assisted since 1984, have made a significant economic impact on the county and have paid more than $20 million in property taxes, said Anderson.
Anderson enjoys working with new businesses as well, but before she does so, sends a new entrepreneur to the Small Business Development Center in Brainerd, first.
There, someone who wants to start up a business will learn about business plans, marketing plans, financing, the whole package.
Once those plans are in place, Anderson has what she needs to begin to work with the business. And the business has some tools to become a success.
“We want businesses to be successful,” she said.
Anderson works not only with business people that need her help, but with business people anxious to help. Those people are part of the 15-member Board Anderson works with.
“They come from all over the county — all business people,” said Anderson. “We have about three or four bankers on the Board, we have stock brokers, we have manufacturers, we’ve got people from all over — and they’re business people and so they know what it’s like to run a business.”
Anderson said the public often doesn’t understand what Community Development does — that it is not a handout for businesses.
“I think they (the general public) got a glimpse of what we do with Larson and what we did there. They don’t realize that we do this every day with smaller companies to help them,” said Anderson. “And a lot of people go to work at these places and don’t know that their job wouldn’t be there if Community Development hadn’t come in to help with financing.”
Anderson has begun using social media to get the word out about Community Development of Morrison County.
A Facebook page has been set up for the organization, as Anderson said site locators use Facebook to look at business locations.
What Anderson wants them to see on Community Development’s Facebook page is a vibrant community interacting and working together.
And while many people and businesses have known Anderson for a while and appreciate what she does, she wants more — she wants to be liked.
To accommodate Anderson, visit Community Development of Morrison County’s Facebook page and click on that “like” button.
For the more conventional, Anderson may be contacted by calling (320) 632-5466.