Fort Gibson looks to jump-start new businesses with revolving loans

By Liz McMahan
Assistant City Editor

November 19, 2008 12:21 am

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Fort Gibson’s town board of trustees is looking for a few good businesses — and willing to put their money where their mouth is.
The town has not dipped into its $502,590 Revolving Loan Fund for several years but trustees discussed its availability at their meeting on Nov. 10.
The fund was established in 1990 after the town obtained a low-interest loan from the Oklahoma Department of Commerce, which the town then loaned to Whitlock Packaging Corp. at low interest, said Debbie Daniels, town clerk.
As Whitlock paid the funds back to the town, the DOC loan was repaid. The town got to keep the interest as “seed money” for the next project.
The fund has since loaned money to South Texas Can Co. and a $250,000 grant from the fund extended water and sewer lines to the town’s south side when the McDonald’s restaurant was built, Daniels said.
There was one other loan to an industry that failed, she said. The town lost money on that venture.
Now, the trustees would like to see the money put into use to bring more retail businesses to Fort Gibson. That would help the town by enlarging its sales tax base, Daniels said.
Among businesses the chamber of commerce has listed that the town needs are another grocery store, a motel and more restaurants.
Trustee Jim Huggins said he wished he had known about the Revolving Loan Fund when he was building his Simple Simon’s Pizza Restaurant.
“I would have owned Simple Simon’s a lot earlier than what I did,” Huggins said.
The fund is available for no more than 50 percent of total funding and requires that the new business employ at least one person for each $35,000 borrowed, Daniels said.
The loans from the town funds are what is traditionally called gap financing. Mayor Stephen Hill explained the concept:
“A good example is I want to start a $1 million business. I’ve got $100,000 in cash, so evidently I’ve got something on the ball. The bank would only loan $800,000. Even though I’ve got the best business plan in the world, the bank just flatly won’t loan but 80 percent. I’ve got a $100,000 gap there. We can fill that gap.