The Utah Board of Indian Affairs did not act Friday on a request from a Navajo entrepreneur for a $250,000 loan to reopen a sewing operation on the reservation that closed after its parent company filed for Chapter 11.

Instead, board members asked the director of the state Division of Indian Affairs to help Peter Benallie obtain money from the companies interested in contracting with his proposed operation.Board members also said they would consider whether trust funds from oil well royalties earmarked for improving living conditions on the reservation should be loaned to individuals as well as companies.

"We're getting into a whole new area of the board financing private entrepreneurs," Director John E. Powless told the board. "I'm not saying we shouldn't do that . . . but we have to develop a program open to all Navajos."

The board had agreed last spring to loan First Native American Corp., the parent corporation of First Native Apparel in Montezuma Creek, San Juan County, a total of $500,000, Powless said..

Despite the loan, Powless said First Native American Corp. filed for Chapter 11 protection in bankruptcy court last June and the sewing operation, First Native Apparel, closed about a month later.

Benallie said the $250,000 loan he is seeking, which would enable him to employ 28 seamstresses and eventually as many as 65, would be repayed in five to 10 years from 3 percent of his profits.

He said he already has several companies ready to contract with his operation if work can begin by Nov. 1. Seamstresses would sew jackets, such as those worn on the car-racing circuit, Benallie said.

After the board decision, he said he was disappointed, especially after driving 300 miles from San Juan County to Salt Lake City to attend the meeting.

"I needed an answer today. These customers don't want to wait," Benallie said. He said he wasn't sure what kind of help Powless or the board could provide.

"I've been in this business for 11 years," he said. "What do they know?" Benallie started his own sewing operating machines last January but said he could not afford to expand.

Bersina Clah, one of the seamstresses who lost her job when First Native Apparel closed, gave the board a petition and letters in support of Bernallie's request.

"For some of us, this is the only job we have to support our families," she said.