Small loans for small businesses

October 5, 2012
Back to TopCommentsE-mailPrintBookmark and Share

If they knew then what they know now, business partners Clayton Willis and Brent Eskew might have looked for outside funding before launching Stage Ninja LLC.

Instead, they spent their own money researching and developing their retractable cable systems for audio equipment, then applied for loans to help the company grow.

“We would have been much better off going in with an idea and a business plan,” said Willis, 40. “We ran into wall after wall.”

So they settled for a more circuitous route. Stage Ninja began marketing its custom stage and studio gear in 2007, two years after Eskew built the first prototype. It took another few years to break even.

Then in July 2011, the Roncalli High School buddies got a boost in the form of a $4,000 loan from the not-for-profit Business Ownership Initiative of Indiana, which was testing microloans at the time. The money helped Stage Ninja build its inventory and improve cash flow. Sales increased as a result, and the partners repaid the note last month.

Now BOI is ramping up is microloan program and Stage Ninja is its first customer, borrowing another $10,000 to continue its growth.

Willis declined to share the private company's financial results, but he said sales so far in 2012 are higher than they were this time last year, which was a record setter.

“It’s a pretty exciting time for us,” he said.

He is grateful for the money and the support from BOI, which also provides one-on-one business counseling, but Willis admits that even $10,000 is far less than the company needs.

“From the numbers we’ve run, we think we could take on a $200,000 loan and really reach our potential,” he said. “But we just could not seem to find that.”

BOI is funding the microloan program with $150,000 in grants from the Glick Fund and Indiana Housing and Community Development Authority’s Business Expansion and Entrepreneur Development fund.

Executive Director Julie Grice hopes that’s just the beginning.

“"The more loans we issue, the more we are able to prove there is a real need in the community,” she said in a statement released this week announcing the Stage Ninja loan.

Ultimately, her goal is to increase the funding pool so BOI can raise lending limits closer to $100,000, giving startups and small ventures access to much-needed capital.

“It’s just not in a bank’s interest to do a lot of lending in space under six figures,” she told IBJ in May.

There's little doubt that finding financing is one of the biggest challenges small businesses face. So how much is enough? Can $10,000 make a difference to a fledgling firm?

ADVERTISEMENT
  • unfortunately
    Unfortunately for every successful step forward for a small business Obama will create two regulations that require more money and two steps back. Small business innovation will get the wet blanket thrown on them under liberal control.
  • Small Loans = Big Difference
    I absolutely believe that small microloans can help a business become more successful. Take a few examples: - $10,000 could fund a rather aggressive grassroots marketing campaign across a city or state - $10,000 could supplement a salary for 6+ months for a new position a startup wants to create, but cannot fund alone (too much risk) - $10,000 can build a new app for a business - $10,000 could fund a new delivery vehicle or a custom paint job (virtual billboard) So, yes, a loan of even $10,000 can make a huge difference to a small business and should be encouraged!

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT
  1. I'm sure Indiana is paradise for the wealthy and affluent, but what about the rest of us? Over the last 40 years, conservatives and the business elite have run this country (and state)into the ground. The pendulum will swing back as more moderate voters get tired of Reaganomics and regressive social policies. Add to that the wave of minority voters coming up in the next 10 to 15 years and things will get better. unfortunately we have to suffer through 10 more years of gerrymandered districts and dispropionate representation.

  2. Funny thing....rich people telling poor people how bad the other rich people are wanting to cut benefits/school etc and that they should vote for those rich people that just did it. Just saying..............

  3. Good try, Mr. Irwin, but I think we all know the primary motivation for pursuing legal action against the BMV is the HUGE FEES you and your firm expect to receive from the same people you claim to be helping ~ taxpayers! Almost all class action lawsuits end up with the victim receiving a pittance and the lawyers receiving a windfall.

  4. Fix the home life. We're not paying for your child to color, learn letters, numbers and possible self control. YOU raise your children...figure it out! We did. Then they'll do fine in elementary school. Weed out the idiots in public schools, send them well behaved kids (no one expects perfection) and watch what happens! Oh, and pray. A mom.

  5. To clarify, the system Cincinnati building is just a streetcar line which is the cheapest option for rail when you consider light rail (Denver, Portland, and Seattle.) The system (streetcar) that Cincy is building is for a downtown, not a city wide thing. With that said, I think the bus plan make sense and something I shouted to the rooftops about. Most cities with low density and low finances will opt for BRT as it makes more financial and logistical sense. If that route grows and finances are in place, then converting the line to a light rail system is easy as you already have the protected lanes in place. I do think however that Indy should build a streetcar system to connect different areas of downtown. This is the same thing that Tucson, Cincy, Kenosha WI, Portland, and Seattle have done. This allows for easy connections to downtown POI, and allows for more dense growth. Connecting the stadiums to the zoo, convention center, future transit center, and the mall would be one streetcar line that makes sense.

ADVERTISEMENT