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100 best places to live and launch

March 26, 2008

15. Salt Lake City

.  Talk back: What do you think of Salt Lake City?

Population: 184,550
Pro: Spectacular scenery
Con: Less growth than some neighboring cities

Nestled between the Wasatch Mountains in the east and the Oquirrhs in the west, Salt Lake City features 11 world-class ski resorts within an hour of the city. Snow lovers arrive en masse every winter to experience the world-renowned powder.

Entrepreneurs find additional reasons to show up and stay for the long haul. Businesses with five or fewer employees requiring less than $35,000 in startup capital may apply to Utah's Microenterprise Loan Fund . The county's economic development office offers loans, grants, on-the-job training and free monthly workshops. Salt Lake City is the center of banking and finance for the region, and tourism remains the dominant industry.

While towns to the south, such as Provo, are currently experiencing hotter economic growth, Salt Lake City, the state's capital, offers a more diverse population and additional entertainment amenities, from fine dining to arts and culture. In the summer, skiers make way for hikers, rock climbers and mountain bikers, but the rugged mountains remain the reason for visiting - and sometimes, staying. -Kelsey Abbott

Ceiling raised for small-business loans to $25,000

By Paul Beebe
The Salt Lake Tribune

October 12, 2007

Flan man's enterprise typifies small-business loan program's triumphs

By Paul Beebe
The Salt Lake Tribune

January 13, 2007

    Applicants are most likely to be women or minorities. Over 60 percent of the fund's borrowers are women. One in four borrowers are minorities. Many are single mothers. Others have bankruptcies or spotty work histories in their pasts. Most are poor or live paycheck to paycheck.
    "They come to us as a last resort. We call ourselves a lender of last resort," executive director Kathy Ricci said.
    Ricci means what she says. The fund's loans come at a steep price - prime (the interest rate banks charge their best customers), plus 5 percent. Right now, that comes to 13.25 percent, an interest rate that reflects the risk connected with lending to unproven borrowers. One in 10 loans goes bad. By contrast, banks typically charge off about 1 percent of their loans, Ricci said.
    Most borrowers, however, build prosperous businesses. A joint study by the fund and the Aspen Institute last year discovered that the businesses of 72 borrowers had combined sales of $7 million and had created 316 jobs.
    "The median revenues they [the fund] are getting are about twice what are being achieved overall in the [microenterprise] industry. They also seem to be working with a number of businesses that are much more likely to bring on employees," said David Black, a program manager with the Washington, D.C.-based leadership and policymaking think tank.
    The fund lends up to $25,000 for five years, but the average loan is $8,500. Money comes from 26 financial institutions, including the state's biggest banks in the form of loans to the fund. Ricci said many lenders take part in order to comply with the federal Community Reinvestment Act. The law requires banks and savings and loans to offer credit throughout their marketing area and prohibits them from targeting only wealthier neighborhoods, a practice known as redlining. And if a loan goes bad, the loss to any one lender is relatively small. "It looks good for them," Ricci said.

    Over its life, the fund has loaned $4.6 million to 450 people. Oddly, however, demand for the loans has declined recently, and Ricci is looking for applicants. The reason for the falloff isn't clear, but Ricci suspects it's because the Utah economy is strong and unemployment is at a record low.
    "It's not easy to be a business owner, so when jobs are available it's a lot easier to go that route," Ricci said.
    pbeebe@sltrib.com
   
    Business loans

    * Who: Utah Microenterprise Loan Fund
    * What: Makes small loans to people who want to establish or expand a "microenterprise," typically a business with five or fewer employees

    * Where: 154 E. Ford Ave., Salt Lake City
    * Executive director: Kathy Ricci

Here's how it works: UMLF assigns its group of business professionals, with specialities that include law, finance, accounting, marketing and public relations, to evaluate loan applicants. During the Micro Business Assessment, a business adviser interviews the loan applicant and reviews the applicant's paperwork. The adviser shares the information with other MBA advisers, independent professionals who offer their services to UMLF at a discount. The adviser then prepares a report with recommendations for the loan applicant. UMLF Credit Committee reviews the report, in addition to a business plan presentation by the applicant, and approves or declines the loan. Ricci says the MBA program gives the loan applicant $800 to $1,000 of business advice for a loan application fee of $75 to $225.

MONDAY January 31, 2005

The business of art

A Utahn's handmade jewelry is finding a market - including with celebrities at the Oscars

By Rosemary Winters

The Salt Lake Tribune

Some publicity is priceless.

When Cameron Diaz walked onto the stage at the 2003 Academy Awards, Kate Holland gasped. Around Diaz's neck hung one of Holland's designs, a $150 chrysophase necklace, accenting her black Prada gown.

Holland, working as a production assistant at the show, ran into an office to call her parents in Salt Lake City. They had already noticed and shared some cries of excitement.

"People wear quarter-of-a-million-dollar jewelry to the Oscars," Holland says. "Harry Winston, Fred Layton . . . They can wear any [designer] they want, so it was huge."

Holland, who studied art at the University of Utah, started her jewelry business, Kate Holland Design, in 2002. Her simple, elegant designs have been worn by celebrity trendsetters such as Diaz, Heather Graham and Jennifer Garner. They have appeared in People magazine, In Style , US Weekly and on the cover of Time Out New York .

Her necklaces, earrings and bracelets stand apart from typical red-carpet accessories that attract attention with blinding sparkle. Instead of diamonds, Holland uses hand-cut precious and semiprecious stones in brilliant colors, usually hung individually on a thin gold or silver chain. She also works with shells, vintage pendants, silk cords and leather. The simplicity of her designs showcases the natural beauty of the materials she works with. Every piece is unique.  

Kate Holland bundles up in a warm vest and wears fingerless gloves as she makes her jewelry in her parents unheated garage. (Al Hartmann/The Salt Lake Tribune )

"People can see the quality, and they are willing to pay for it," says Janie Franks, manager of Lolabella, a women's clothing boutique in Salt Lake City. Franks says the jewelry, which is usually priced between $80 and $150, is more expensive than other jewelry the store carries, but consistently sells out.

Despite her star-studded clientele, Holland still struggles to turn her passion for design into a successful business. She had significant losses in 2002 and 2003 and just broke even in 2004. But Holland sees her 2004 numbers as the beginning   of an upswing.

At 27, Holland seems an unlikely entrepreneur: She cares more about how much a customer loves a piece than how much is paid for it, and she would rather enjoy her work than be rich.

"I'm definitely an artist, not a businessperson," she says. But Holland earned a business minor along with a bachelor's degree in painting and drawing, and her ambition has led her to put aside her career in film production and even her personal comfort.

"I was e-Baying my life away," she says. "Anything I can sell, anything I can do, I [will] do it [to keep the business going]."

Last May, her fortunes began to turn. Holland received a $25,000 loan from the Utah Microenterprise Loan Fund, which helps small-business owners who are unable to qualify for traditional loans. Although Holland didn't have collateral to secure her loan, "she was a slam dunk just because of who she is," says Danielle Lower, assistant director of the Microenterprise Loan Fund. "Our loans are really based on the character of the business owner. [Holland] portrayed the confidence and enthusiasm we need to see . . . It was contagious."

The loan has allowed Holland to buy gems at bulk rates and increase her inventory. She also was able to hire a company to rebuild her Web site, http://www.kateholland.com , allowing customers to shop online. Holland would love to grow her business into a larger design firm with products in addition to her jewelry.

The skills are there: Holland paints, draws, quilts, builds pine furniture and does custom framing. At one time, she   had a boutique in her home to sell the different things she makes. Holland shrugs off any suggestion that she is multitalented and instead describes herself as "scattered." Her many interests made it difficult for her to imagine a career path. In college, she dreamed up the position "creative executive" of a corporation.

"I don't think I knew I'd have my own company," Holland says. "But when I look back, it makes the most sense."
    rwinters@sltrib.com

Deseret Morning News, Sunday, June 06, 2004

Micro-loans leave basement

Fund celebrates new digs, entrepreneurial successes

By Jenifer K. Nii
Deseret Morning News

Sue Barber, left, and daughter Tonya Iongi, co-owners of Floral Keepsake Collection in Bountiful, hold some of the preserved flower items they make.

Jeremy Harmon, Deseret Morning News

Patricia Happi left France for Utah in 2000 to be closer to family. Her husband, Frederic Mongue, had relatives in Utah, and though she'd spent the previous four years building a successful cleaning business, priorities are priorities. When the time came to move, they did.

For a few years, she tried to make it work as a reservations supervisor for a car rental company, but she always felt the tug of the entrepreneur within.

"I thought working was great, but you know how it is," Happi said. In 2001, she launched Mister Propre Cleaning Solutions Inc., with five employees. The company's beginnings were modest, and after nearly two years, Happi said things weren't getting any easier.

"When you're a new business - and my business was less than two years old - and when you come to a new country, it is tough," she said. "I didn't have credit, so it was tough for me to get credit. Everywhere I went, I was told, 'Your business is too new, and your credit history.' I was told to work a little bit more, a little longer."

"The big thing was the start-up costs," she said. "To have somebody like the UMLF to be able to assist us, to kind of sponsor us - they believed in us when nobody was there."

On Wednesday, the UMLF will celebrate the grand opening of its new facility, 154 E. Ford Ave. (3415 South). The agency has spent the last eight years in a single room in the basement of the Salt Lake County Housing Authority building, 3595 S. State.

"We're ecstatic to finally have some sunlight," said UMLF executive director Kathy Ricci.

Along with its new digs, Ricci said the UMLF is in the midst of a re-branding campaign intended to extend its reach toward entrepreneurs who are unable to access other means of financing.

"We consider ourselves the lender of last resort," Ricci said. "It's so rewarding to be able to say to someone, 'We really believe in you, and we believe you have the talent and the skills to make this happen, and we're going to lend you the money to do it.' "

Sue Barber, co-owner of Floral Keepsake Collection in Bountiful, already had five years in business when she went to the UMLF for a loan. Floral Keepsake specializes in preserving flowers using freeze-drying technology.

Barber, previously a manufacturer's representative in the giftware and home decor industry, learned that there was a gap in the Utah keepsake preservation industry.

"Freeze-drying is a unique concept, fairly new to the industry," Barber said. In 1997, she and her daughter, Tonya Iongi, bought their first machine and opened Floral Keepsake Collection. When they were ready to expand the business five years later, Barber said the UMLF was the most attractive option.

"We just needed a little capital at that time for expansion," she said. "We were well-established by the time we went to UMLF, and we didn't require a large loan. They made it easy - there wasn't much red tape. All we had to do was do a presentation, present our business plan to the loan committee. That (loan) was our springboard."

A micro-loan helped Patricia Happi, right, and spouse Fredric Mongue with cleaning business.

Chris Bergin, Deseret Morning News

Since it was incorporated in 1991, the UMLF - designated a nonprofit community development financial institution - has made more than 360 loans, totaling more than $3.5 million. This year, Ricci said the UMLF is expected to surpass $600,000 in loans, the most in its lending history. Its loan pool currently stands at $1.2 million.

The fund makes loans from as little as $3,000 to as much as $25,000 (for qualifying residents of Salt Lake City proper, thanks to a grant from the city). The UMLF is financed by partner financial institutions, foundations, corporations and local government. In addition to general business loans, it also offers loans specifically for child-care providers and for people going through vocational rehabilitation and looking at self-employment as a way to get back into the work force.

"It provides a service to the community that wouldn't normally be served by traditional financial services from commercial banks," said John Wormdahl, executive vice president and chief credit officer of First Utah Bank, one of the 24 financial institutions contributing to the UMLF. "The loan amounts are so small that (commercial banks) don't necessarily dedicate a lot of resources to making the $10,000 business loans. The UMLF has done that and, I believe, has done a pretty good job at it."

We feel it's the right thing to do for the community, to serve that sector of the small-business community that wouldn't otherwise be served."

Floral Keepsake now has four machines, and the business is available to serve clients statewide.

The UMLF "can only take you so far," Barber said. "But sometimes that's all you need - that jump start. Kathy (Ricci) is a powerhouse. She's always been there for us. She doesn't leave you once you borrow the money. And the UMLF isn't just a lending institution. They really take your business into consideration."

Edward Leary, commissioner of the Utah Department of Financial Institutions, said the UMLF is not regulated by the department. But Leary expressed confidence in the organization's board of directors, which is made up largely of representatives from participating banks, and its mission.

"It's part of the financial institutions' efforts, those that are members, to comply with the Community Reinvestment Act requirements," Leary said, citing a law requiring financial institutions to give back to their communities. "The loans are of a small amount, and generally of a quality of borrowing that are normally not what I would call 'bank quality.' So it's not taking business from anyone else as far as bankers are concerned. But it is an effort to help small businesses get started and, over time, I've heard interesting stories of how they have helped people and small businesses."

Half of the UMLF loans go toward funding startups, Ricci said. The other half are home-based businesses. Sixty percent of borrowers are women, she said, and one-third of those women are single mothers. About 26 percent of the businesses funded by the UMLF are minority-owned. Just over 60 percent are in the low- to moderate income community.

"We're about community development," Ricci said. "We just use micro-loans to do it. The reason micro-loans are important is because it helps people supplement their income, create jobs, build assets and wealth and increase their net worth. On the personal side, helping people build businesses helps them increase their self-esteem and quality of life, and unifies families.

"Our hope and our goal is to help a person improve their position financially and personally, which in turn helps their family, their neighborhood and their community. We've seen these loans revitalize neighborhoods."

Flowers are preserved with freeze-dry technology at Floral Keepsake Collection, in business since 1997.

Jeremy Harmon, Deseret Morning News

SATURDAY October 11, 2003

More money to offer: Utah microenterprise fund increases the amount it can lend to entrepreneurs

By Lesley Mitchell
The Salt Lake Tribune

The loan fund is supported by financial institutions that do business in Utah and contribute to the loan fund as a way to fulfill some of the requirements of the federal Community Reinvestment Act, which in part requires banks to do more business with disadvantaged individuals and minorities.

Under the new limits, the fund still will administer the loans to Salt Lake City entrepreneurs, only the source of the loan will change: The fund will provide $10,000 of the loan amount while the city provides the balance up to the $25,000 limit. Four businesses in Salt Lake City have received loans under the new limits. They include Keyr Grocery and Spices, an East African market on Salt Lake City's west side.

Owner Abdi Farah, who will run the business with his mother and sister, was born in Somalia but came to the United States in 1994 to go to college in Utah, where he earned a bachelor of science degree from Utah State University in anticipation of enrolling in medical school. Instead, he decided to go into business. He has worked in Utah in technical support before writing a business plan for Keyr (which means "good thing" in Somali) Grocery, which is at 1735 S. Redwood Road, Suite 120. "If I could have borrowed only $10,000, I don't think we could have done this," said Farah, who also plans to open a Somali restaurant.

A Microenterprise Loan Fund Opens Doors in Utah  by Kathy Ricci, Executive Director, Utah Microenterprise Loan Fund

Jon Venzia and Joe Ballato formed Greenhouse Effect Coffee Shop and Crepery in April 2001. They recieved a $3,080 micro-loan in November 2001 from the Utah Microenterprise Loan Fund.

Thirteen years ago the Utah Small Business Development Center (SBDC) and others organized a 21-week business plan training course designed for single mothers living in subsidized housing. Although it was a good course, it raised a disturbing question: "How can you put single parents through 21 weeks of small business training and then offer absolutely no sources of financing for them at the end? It's almost a cruel joke."   This was the impetus for the creation of the Utah Microenterprise Loan Fund (UMLF). We knew that there were significant numbers of low- to moderate-income women and minorities who had the character and determination to succeed at self-employment and microenterprise development. But they lacked access to traditional sources of capital.   At a meeting hosted by the Federal Reserve Bank of San Francisco, senior managers at several Utah financial institutions discussed the prospects for a microenterprise loan fund and the importance of cooperating to fund its loan pool. Management and funding details were gradually worked out, and it was decided that investors, carrying loans to the fund under the category of "other assets," would receive quarterly interest payments based on the federal discount rate on the first day of the quarter plus 50 basis points. Capitalized with approximately $462,000 from a dozen financing institutions and officially incorporated as a 501(c) 3 in 1991, the UMLF made its first loan in 1993.

How our loan fund works

Most small business start-ups are financed from personal savings or investments from friends or family. Once started, small businesses (just like larger ones) require a source of credit to sustain them or to finance their growth and development. UMLF clients lack access to conventional sources of start-up capital, and because they typically have neither capital nor collateral -- along with poor credit histories in many cases -- they are, by conventional standards, poor credit risks.

The UMLF helps to overcome these obstacles by providing modest loans, up to $10,000, for business proposals that demonstrate a sound strategy and the probability that the debt can be repaid from business operations. Applicants personally present their business proposals to a committee of volunteer bankers, small business owners, and community representatives. It's an opportunity for applicants to market their ideas to a tough but supportive audience -- and for the committee members to assess applicants' knowledge, integrity and commitment. In this kind of lending, perhaps even more so than elsewhere, character is key.

Jorge Fierro is a case in point. When he moved to Utah from Mexico, he was unimpressed with the Mexican food he found in local grocery stores. In the summer of 1997 he started selling freshly cooked pinto beans at Salt Lake City's downtown Farmers Market. His business consisted of a card table to display his beans, two coolers to keep them fresh, and some sample recipes. Soon he had a loyal group of customers -- and hopes for expansion.

Later that year Jorge and his partner, Karin Palle, secured a $10,000 loan from the UMLF to fund packaging, labeling, and distribution of his Rico's Pinto Beans. Sales financed the start-up of Rico's Mexican Market and Catering. Today Jorge's business employs 14 and earns more than $16,000 per week in sales. He has an extensive product line -- all featuring fresh ingredients -- and distributes to more than 15 establishments in Salt Lake City and Park City. An active advocate for and supporter of small business start-ups, Jorge is quick to acknowledge the UMLF's importance to his own success. "The UMLF," he says, "was the only organization willing to finance our dream."

A growing portfolio

In ten years of lending the UMLF has made over 340 loans totaling just under $3 million. We have 24 participating investors and a loan pool of over $1.2 million. Starting as a pilot program in Salt Lake County, we have since expanded to serve nine counties that account for about 80 percent of the state's population. Half of our loans have been to home-based businesses; 60 percent to woman-owned businesses (a third of these owners are single mothers); 26 percent to minority-owned businesses; and half to new start-up ventures.

As with our loan to Jorge Fierro, most of our loans have been our original "traditional micro-loan" of up to $10,000, available to new or existing businesses at a rate of prime plus 5 percent and amortized over 5 years. Working with our clients, we've developed four additional loan products to meet their needs. The "next small step micro-loan" of up to $3,000 is available to existing businesses that need a quick infusion of working capital. A "child care provider micro-loan" offers funding up to $25,000 to child care providers, and the "vocational rehabilitation micro-loan" makes up to $20,000 available to people looking at self-employment as a way to return to the work force. And recently Salt Lake City granted the UMLF $250,000 to underwrite loans of up to $25,000 for entrepreneurs located within the city limits.

It's worth noting that Salt Lake City approached the UMLF about this loan initiative, not the other way around. The concept of microcredit for microenterprises is definitely catching on as an effective community and economic development tool. We've been successful in obtaining Community Development Block Grants (CDBG) from county and local city governments to fund loans and loan loss reserves in their communities.

What about loan performance? Here the UMLF has pleasantly surprised its investors. At the outset, concerned about the viability of the target market, they required a 50-percent loan loss reserve. That has long since been lowered to 20 percent. Losses since inception have ranged between 10 and 15 percent. Losses are shared proportionately among investors and the UMLF. (For example, if a full $10,000 were to be charged off, the UMLF would absorb $2,000 through the reserve, and participating investors would write down the level of their investments by their proportional share of the remaining $8,000.)

In addition to the benefits of earning interest income and sharing loan loss risks, participation in the UMLF is an excellent way for Utah banks and industrial loan corporations to meet community credit needs and comply with the Community Reinvestment Act. And since the UMLF is a certified Community Development Financial Institution (CDFI), banks can also take advantage of the CDFI Fund's Bank Enterprise Award program.

As our bank investors' experience demonstrates, there are many advantages to partnering with local microenterprise organizations:

. By pooling financial resources, banks can extend the scope of lending capacity for the benefit of the community.

. The risks of community development lending can be broadly shared.

. Transaction costs can be reduced and managed by using professional expertise and in-kind contributions.

. When a participating bank has to turn down a loan request that doesn't quite meet conventional standards, the bank can make a referral to the microenterprise organization.

. Banks can develop a new source of potential customers, as microloan borrowers establish commercial track records.

. Banks can participate in co-lending opportunities, in which the microenterprise organization makes part of the loan and the bank makes the rest. (For example, if a start-up needs $35,000, we might make a $10,000 loan contingent upon a bank loaning $25,000, with our position subordinated to the bank.)

. Through participation in a microenterprise loan pool, a bank can help underwrite cash flow loans in conjunction with regular commercial and/or SBA loans. (To illustrate: a silk screening company gets an SBA loan to purchase needed equipment and the UMLF makes a $10,000 working capital loan.)

By now it's no secret -- at least to us -- that many people who may not qualify for conventional loans are worthy candidates for credit nonetheless. Over a ten-year span we've demonstrated that the Utah Microenterprise Loan Fund can serve as an alternative funding vehicle focusing on personal character and the capacity of a microbusiness to service its debt. And because the UMLF provides business funding, not grants, our clients can work their own way up the economic ladder with dignity and self-respect.

For more information, contact Kathy Ricci at (801) 269-8408 or by e-mail at <kricci@umlf.com>. Website: www.umlf.com