When John Jahoda wanted to expand his business in Glenville about seven months ago, he discovered that local commercial banks were not lending.
“The banks at that time did not move on it,” said Jahoda, who has operated Jahoda’s Cabinet Corner in Point Plaza on Route 50 since 2004.
Undeterred, he contacted town officials and they directed him to the county. The county came through with a $50,000 loan at 7.5 percent interest over 10 years.
Jahoda said the rate is less than commercial rates and perfect for his needs. “In all honesty, we were looking for inexpensive money,” he said.
The money is through the county’s small business loan fund. The county several years ago obtained a $250,000 state grant for the fund. It is restricted to projects in towns and villages with populations of 50,000 or less. The county also operates a loan fund for city-based projects.
Loans are in the range of $50,000 and are generally for a five- to seven-year term with interest rates in the 7 percent range, said Ray Gillen, commissioner of economic development and planning for Schenectady County.
“As part of the unified county economic development effort we centralized processing of these various small loan funds run by the city and county. They are all handled by the Business Center with direct supervision by county economic development staff,” Gillen said.
Jahoda said he pledged his business as collateral against the loan, with which he plans to expand his product line to include countertops. He has already hired or rehired two people and plans to add two more to his six-person staff. Jahoda also sells kitchen cabinets and supplies.
“They did not require it, but we promised the county we would expand and hire,” Jahoda said.
His timing couldn’t have worked out better, he said. “The cabinet business is going well at this time. We are seeing people going back to larger kitchens as opposed to doing a facelift on their existing kitchens. That lets me know things are breaking through.”
He called the recession “the worst I have ever seen” in his 25 years in business.
The county loan fund has a balance of $305,000, Gillen said. “The loan fund has earned money from loan repayments, so its balance today is higher than when it started,” he said. “We had only one loan loss in this portfolio, but the project was a success. We got that old gas station and retail store cleaned up on Altamont Avenue in Rotterdam,” Gillen said.