MILLCREEK — A loan program aimed at helping small Salt Lake County businesses grow is expanding.
The amount of money the county is able to lend through its economic development revolving loan fund will increase from $1 million to approximately $7 million following an agreement with six Utah banks to contribute to the fund, Mayor Ben McAdams announced Monday.
The banks that have signed on are American Express, American Express Centurion Bank, GE Capital Bank, GE Retail Bank, Zions Bank and CIT Bank. Each institution will contribute $1 million to the fund, bringing the total amount to $7 million, McAdams said.
"I appreciate the willingness of our business partners to participate and to help us expand the reach of our revolving loan fund program," he said. "This program is focused on helping small business with loans and with financial expertise so that businesses can launch, expand and create jobs."
The county's revolving loan fund was started 25 years ago with $2 million in Community Development Block Grants from the U.S. Department of Housing and Urban Development. At the time, the money was used for traditional small-business development.
In 2005, the county made operational changes to better align with state economic development targets. The committee that oversaw the program was expanded to include more financial industry experts, and risk-management procedures were enhanced to ensure solvency of the program, McAdams said.
On Monday, the mayor announced new appointments to the oversight committee.
The fund lends amounts up to $250,000, with terms of four years at 14 percent interest or five years at 16 percent. The business must be in the high-tech industry and create at least one job for each $35,000 borrowed.
In addition, the business must be located in the urban county area, including unincorporated Salt Lake County, Alta, Bluffdale, Cottonwood Heights, Draper, Herriman, Holladay, Midvale, Murray, Riverton and South Salt Lake.
Since 2005, more than 500 new jobs have been created using loans from the revolving loan fund, with no defaults thus far, McAdams said.
One of the beneficiaries of the program was FatPipe Networks, a Millcreek-based cyber-security firm where McAdams made Monday's announcement.
In 2006, the company received a loan and used the $250,000 to hire salespeople to grow the business, which now has offices in the U.S., U.K., India, Asia, Europe and Australia, said Sanch Datta, FatPipe Networks' chief technology officer.
"The county walked us through the process (and) helped us secure the loan," Datta said. "We were further able to use the funds to expand into Europe and Southeast Asia. Later, we also acquired a couple of companies in the U.S., executed our expansion plans and paid off the loan."
The firm now employs more than 200 people worldwide, with approximately 60 at its Utah headquarters, she said. Among the company's 2,000 clients are the FBI, the World Health Organization and the U.S. Supreme Court.
McAdams said the success of the program has led to its growth, and the county aims to continue helping local small businesses prosper and bring more jobs to the area.
"We're going to look at the best bang for the buck, and how we can create the most jobs with the lowest possible risk," he said.