The Nevada State Development Corporation has been giving small business in the state a boost up since 1981.
Working with banks and the U.S. Small Business Administration, the nonprofit company helps businesses with real estate loans to remodel, expand or buy buildings, or to purchase long-term equipment.
LA Bakery in Carson City is a recent beneficiary of the loan program.
Ali Arbabha opened his business in 2009 as a wholesale and catering business under the name Shirini shop. He opened a café at 220 West John Street in 2012 and used a loan orchestrated by NSDC to remodel and expand from a seating capacity of 15-20 people to 36.
Arbabha said the loan process, from application to funding, took about four months.
“I cannot say enough about the staff at Nevada State Development Corporation,” he said in a press release. “They realized my needs right away and guided me through the entire process. They went all the way for me.”
The bakery also sells items online — including hard to find gluten-free, vegan and diabetic items — and provides wholesale products to such customers as Whole Foods Market, Bibo coffee company, the Atlantis hotel-casino, Naan and Kabob restaurant and others.
Business has been good.
“We need to expand again,” he told the NNBW.
The Nevada State Development Corporation can help privately owned businesses of any type through the SBA 504 loan process. Generally at interest rates below market prices, the loans can assist small business owners in buying, building and improving commercial buildings.
NSDC is the largest SBA 504 loan provider in Nevada, with offices in Las Vegas and Reno. It also brokers loans for small businesses in adjoining counties in California and in Mohave County, Arizona.
In fiscal year 2014, 46 loans for $17.6 million were approved through the NSDC program and 49 were funded for $19 million (three of those funded were approved in 2013).
“Our batting average is very high,” said Roger Kadz, NSDC business development officer. “On rare occasion there’s one that doesn’t go through because of issues we didn’t know about.”
Kadz started his career in the banking business before joining NSDC in 2013, and understands their perspective in the process.
“As a banker, I was on the other side of the table,” he said.
Although most loans are building related, some are for long-term equipment, defined as equipment with a useful life of 10-years.
One such company was a dental office that received funding in 2014 for dental equipment.
Lately, Kadz said, there’s been an increase in construction-related loan applications for businesses such as plumbing/heating, tools, flooring electrical, roofing, and architecture.
“We’re seeing in our pipeline and seeing things done last year, quite a few businesses that are related one way or another to the trades and construction,” he said. “Most of these are looking for facilities to run their business from.
“It shows there is a return of demand for residential and commercial construction.”
The average loan administered by Nevada State Development Corporation has increased to more than $750,000 from $384,000 a year ago, according to Kadz. The average size of NSDC projects has more than doubled in the same period, to $1.981 million from $978,000.
NSDC staff works with the financial institution of the business owners’ choice. Typically that bank will fund 50 percent of the loan as first trustee. The SBA will fund 40 percent and the business owner funds 10 percent.
There is no limit on the amount that can be borrowed from the bank portion of the loan. The SBA portion recently increases to up to $5 million for most businesses and up to $5.5 million for manufacturers and certain energy-related projects.
SBA 504 loans tend to have lower down payments, longer loan terms and larger loan amounts than standard business loan programs.
For more information on the Nevada State Development Corporation, go to http://www.nsdc.com/ or call the Reno office at 775-770-1240.