Port looks at new loan programRed Wing Port Authority is looking to add a new loan program to its repertoire.
By: Jon Swedien, The Republican Eagle
Red Wing Port Authority is looking to add a new loan program to its repertoire.
The economic development agency has approached the Red Wing Industrial Development Corporation about administering or taking over the entity's underutilized loan program.
RWIDC's loan program would differ from those the port currently runs, officials said, because its requirements would be less stringent.
This would make the loan attractive to start-up companies or existing business that don't have much capital to put toward new projects.
"I think now is the perfect time for these types of loans," Port Authority Executive Director Myron White said. Because the economy is sluggish and companies are less likely to move, it's important for economic development officials to foster development from within the city, White said.
Typically the port has acted as a gap-financier, meaning businesses have acquired a bank loan or other start-up capital before approaching the port. Under the proposed loan program, businesses could apply for the loan without having acquired other financing.
The proposed loan program would also require less collateral or accept less secure types of collateral, such as intellectual property, than the port's other loans.
While it would be a riskier loan, it could potentially generate greater rewards, port officials said. That's because in return the port would receive higher interest rates or it could have opportunities to buy cheap stock if a company were to become successful.
Port officials said before approving this loan they would carefully review applicants' business plans.
"We want to have people with really good ideas -- that could work," White said.
The RWIDC's has become largely dormant in recent years and its leadership has expressed interest in handing off its loan program, port officials said. They added, talks are only preliminary and nothing has been agreed to in ink.
Representatives from the RWIDC could not be reached for comment.