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May 13, 2010 Bangorbiz

EMDC brings business loans back to the forefront

Photo/Doug Kesseli Atticus Mulready, Eastern Maine Development Corp.'s loan officer, talks at a seminar on finding business financing during a recession
By Doug Kesseli

After more than a year without a designated loan officer, Eastern Maine Development Corp. seems to be reinvigorating its efforts to bolster small business development in the six-county region it serves. Atticus Mulready, the organization's relatively new loan officer, drove that point home last week at a seminar on investing in businesses during tough economic times, held at the Bangor Region Chamber's Bangor Business Expo.

The seminar attracted Kim Leonard, a prospective business owner from Levant, who, with a mixture of trepidation and hope, went looking for the answer to a simple question that has far-reaching consequences for her.

Her dreams of running her own cosmetology salon, deferred 18 years ago so she could raise a family, seemed even more remote since she lost her mid-level management job at Burlington Coat Factory in Bangor.

When the opportunity came for questions, Leonard asked whether someone who is unemployed could obtain a business loan. The answer from Mulready was a less than unequivocal "it depends."

"It's still a little difficult," said Mulready, who joined EMDC in January after a decade as a commercial loan officer in the region.

Leonard's success at procuring financial backing would not only depend on her knowledge of the industry -- she has kept her cosmetology license current -- but other factors such as feasibility and competition. Although Leonard didn't leave with a guarantee for a loan, Mulready's response did give her a heightened sense of optimism. "Now I know it's a possibility, I can go full steam ahead," she said.

Formed in 1967, EMDC is a nonprofit economic development hub organization that connects businesses, from micro to municipality level, to resources they need, whether it is capital or assistance in developing business plans. Financing resources include access to micro loans that cap at $35,000 to larger business loans that top off at $1.5 million.

During his 45-minute presentation at the expo, held at the Bangor Civic Center, Mulready offered some insight into the types of financing available to startup businesses and those looking to the next step, as well as other resources available through his organization.

Microloans, for example, are available for service, retail and manufacturing businesses, and can be used for working capital purchasing equipment, furniture or building improvements but are restricted from some uses, such as refinancing debt and paying salaries.

While the larger deals involving EMDC, such as a two-year contract with the city of Bangor to help the municipality secure additional funding for a proposed arena, are making the headlines, smaller businesses may be the bread and butter of the operations.

Although EMDC partners with many financial institutions, Mulready says when it comes to small business loans and startups, EMDC has some options that the banks likely wouldn't consider. Microloans that exceed $20,000 actually require a letter of denial from another financial institution as part of the approval process through EMDC. And Mulready says EMDC can be more flexible when it comes to down payments and collateral.

Financial institutions, once overly willing and eager to provide loans to startups or existing entrepreneurs looking to expand, have become more reserved, he says.

Kendra Speed, manager of the TD Bank branch in Brewer, agrees that EMDC fills a niche that banks don't but she is quick to point out that banks like hers do partner with EMDC projects when the banks' criteria are met. "We are conservative with our commercial lending but we are very good with our lending," she says.

After a decade in the larger commercial lending at both TD Bank and Bangor Savings Bank, Mulready said he moved to EMDC to be able to work with clients from the ground up: "Sitting down with folks and making sure that they can start their business and keep their business going; it's an emotional tie to that business," he says.

One of the 30 or so loans Mulready has closed since coming on board involved a mother and daughter who had been involved in a baking business for years and wanted to venture out on their own. They had no money to put down, but convinced Mulready that they had what it takes to succeed. Convincing lenders was a tough sell, but he eventually was able to secure the necessary funding to get them started, Mulready says. "Once I have somebody on board and I feel strongly enough about them, then I don't back down," he says.

What these two had was a strong sense of commitment and a clear idea of what they wanted to do and how they wanted to do it, although Mulready says EMDC has resources to help small business owners develop plans.

There is a certain gratification that comes from working this way, says Mulready, who told the workshop audience of a dozen people that he received more satisfaction out of getting $15,000 in financing for a small business than he did when he landed $7 million for an account.

And there is a sense of altruism that Mulready looks for in the businesses that he helps. "We're looking for businesses that will ensure that eastern Maine is growing; that businesses around here are trying to create jobs; that they want to go out and do the right thing and not just something for themselves," he says.

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