Mayor unveils 2 loan funds for start-up businesses

http://www.post-gazette.com/pg/09106/963360-100.stm

People with business ideas but no funding now have two new places to turn -- a city loan fund for new technology businesses and a public-private lending pool for minority- and women-owned businesses.

Pittsburgh Mayor Luke Ravenstahl said today that he expects the new funds to put nearly $4 million into the hands of new or expanding businesses.

"It's been my goal, as a young person, to keep and attract the young talent we have in this city," the mayor said at a South Oakland press conference announcing the city's Pittsburgh Entrepreneur Fund and the Landmarks Community Capital Corp.'s Metropolitan Loan Fund of Pittsburgh. "These two funds will enable them to capitalize on opportunities."

The city's Urban Redevelopment Authority will run the Pittsburgh Entrepreneur Fund, which will start with $1 million in federal money and may soon be boosted to $2 million, Mr. Ravenstahl said. Geared toward start-ups in the information technology, life sciences and environmental industries, it will be able to lend against intellectual property, like patents, unlike existing URA business development programs.

Guidelines aren't final, but it will probably lend as much as $200,000 for around five years at interest rates that will depend on the level of risk involved.

"Everyone knows it's difficult, if not impossible, to get access to the appropriate loans" in today's economy, said Audrey Russo, president of the Pittsburgh Technology Council, adding that the impact of the city's investment could be "quite profound."

The Metropolitan Loan Fund has $1.75 million, from the county, other lenders, and the Heinz Endowments, said Howard B. Slaughter, Jr., chief executive officer of Landmarks Community Capital Corp. It is already weighing several dozen possible borrowers with ideas including a new animal hospital, a toy store and a construction company.

Mr. Slaughter said there is no minimum or maximum loan size, rates will be below market, terms will be around five years, and anyone may apply, though the focus is on women and minorities who are starting or expanding businesses.