Small businesses take advantage of new funding program

Just over $75,000 may not seem like much -- but a little can go a long way for a small business.

Minglewood Brewery in Cape Girardeau and Parengo Coffee in Sikeston, Missouri, plan to create new jobs as a result of money loaned to them by a locally based economic development organization's new program.

The organization, called the Missouri Innovation Corp., operates through the Center for Innovation and Entrepreneurship at Southeast Missouri State University, and this fall began offering opportunities for businesses through revolving loan funding. The funds come from a $1 million investment by the U.S. Dept. of Agriculture's Rural Development program.

In the past month, Minglewood Brewery, a restaurant, bar and brewhouse at 121 Broadway, received a $50,000 loan through the corporation. Parengo Coffee, a specialty bean roaster and coffeehouse that opened in 2013 at 109 W. Malone St. in Sikeston, is adding a second location, received $25,500.

Colby Williams, who manages Parengo Coffee, said the loan funds made growing the business possible.

Tony Johnson, brewmaster at Minglewood Brewery in Cape Girardeau, installs thermostats for the fermenters Monday. (Laura Simon)

"From the beginning, we wanted to expand fairly quickly, even after being open here only a year," Williams said.

With the money, renovations of a former Taco John's restaurant at 1205 E. Malone Ave. are underway for the second Parengo Coffee location, which will share space with an independent bakery and create 10 to 12 new jobs, Williams said. The bakery also is expected to supply products to the original location, expanding offerings.

Minglewood owner Stuart Matthews is using the loan funds his business received as "working capital," he said, and hiring servers. Minglewood opened in October after a renovation of space in the old Keys building, and plans to have its own beers on tap within a few weeks.

Brian Tapp, director of outreach for the innovation center and chief operating officer for the organization, said the businesses that receive loans through the program can use the funds for capital, equipment, facility modifications, real estate and other purposes. A stipulation of the approval for businesses is that the creation and retention of jobs must be connected. Most of the loans are in the $25,000 to $50,000 range, Tapp said, but the maximum loan amount is $125,000.

The organization's target for loans are startups and small businesses that want to grow, but the organization also can fund some agriculture production and agriculture-related technology, Tapp said. The loans essentially are meant to "fill a gap" for businesses, also known as gap financing, Tapp said, in cases where a traditional lender offers, for example, a $25,000 loan when a business needs $50,000 to cover an equipment cost.

"We do not make direct loans without a primary lender, so typically the leads are going to come from someone knowing about the program and working with a bank," he said.

The $1 million revolving fund is designed to be used over a 30-year period, and works in a way that has the organization loaning money out as it comes back into the fund. Tapp said the opportunity is meant to complement several other similar current loan funds, such as those offered by the Southeast Missouri and Bootheel regional planning commissions.

The typical turnaround time for the loans is 45 days, Tapp said. Loan applications are reviewed by a committee and approved by the organization's board of directors.

"It was a great experience," Matthews said of the loan application process, "because the people there are really big on bringing more small business to town."

The Missouri Innovation Corp. is a renamed not-for-profit entity -- until last year it was called the Missouri Research Corp., which supported applied research on the university campus. A change in focus over several years, turning more toward support for entrepreneurial activity and economic development, prompted the university's board of regents to change the name in 2013.

Tapp said the organization is working with several more applicants and bank partners on loans.

eragan@semissourian.com

388-3632

Pertinent address:

One University Plaza, Cape Girardeau, MO

121 Broadway, Cape Girardeau, MO

109 W. Malone, Sikeston, MO