Fredric Carter had no problem deciding where to open his sign-making business. "Our Baltimore store is located in the middle of an empowerment zone, about four blocks from where I was raised," says Carter, who co-owns the Baltimore and Washington, DC, franchises of ASI Sign Systems with Charles K. Taylor.
What prompted the duo to set up shop in the zone was the 80/20 Loan Fund, a high-risk-loan guarantee program sponsored by the Empower Baltimore Management Corp. "We started talking to [Empower Baltimore] in April 1997, and the interest rates they offered were very favorable," remembers Carter, whose accountant pointed out the advantages of doing business in the empowerment zone. "Also, the amount of collateral required was not the same as a commercial bank required."
How does the 80/20 Loan Fund work? Empower Baltimore Management, which oversees zone activities, provides 20 percent of the total loan a company might need, up to $100,000. The balance is supplied by a conventional lender. ASI Sign Systems obtained two loans totaling $116,000 at 4 percent interest each, says Carter. In addition to helping facilitate financing, empowerment zone officials are working with Taylor to set up a formal computer-training program. They've also plugged the company into a vendor database and introduced the partners to potential clients.
The outcome of any company's dealings with these officials is influenced by many things: how organized the zone programs and personnel are, what stage the business is in, what resources an entrepreneur brings to the equation and, finally, how much patience a business owner has to negotiate with what is, after all, another government bureaucracy. Fortunately, as in Carter's case, the experience can be a very positive one.
ASI Sign Systems, firstname.lastname@example.org