April 4, 2008

REDLANDS, Calif.- Gwen Bedics has been hired as a new Business Development Officer for Redlands-based Enterprise Funding Corporation. Bedics has over 15 years of SBA lending experience and will be in charge of reaching out to businesses in the High Desert.

'Gwen Bedics comes to Enterprise Funding with a remarkable career and reputation in the High Desert’s banking industry. She will play a key role in lending to growing businesses in the High Desert area,' said Jeff Sceranka, president of Enterprise Funding.

Bedics was previously the Vice President/SBA Manager at Desert Community Bank in Victorville.

Prior to that, she held positions at the High Desert National Bank in Hesperia and Sun Country Bank in Apple Valley.

'I am excited about joining Enterprise Funding. This position will allow me to utilize my SBA lending expertise to help the High Desert community and businesses grow,' said Bedics.

Gwen has been a High Desert resident since 1979. She currently resides in Lucerne Valley with her husband Scott, their daughter Casey and son Ryan.

Since inception, Enterprise Funding has approved over $500,000,000 of SBA 504 loan projects. Enterprise Funding is celebrating its 25th anniversary this year.

By DAVID JAMES HEISS, Staff Writer

REDLANDS - Most small business owners looking to expand or procure new equipment often overlook a nonprofit entity based in their own backyard. Enterprise Funding, a certified development company based on the second floor of the Citibank building on State Street, has infused more than half a billion dollars into the local economy.

All profits from certified development companies, or CDCs, go into economic development projects, memberships to organizations like local chambers of commerce, and providing scholarships - among other areas.

"We're the little engine that's trying to do good things in the community," said company president and former City Council candidate Jeff Sceranka. "We're also in a giant battle with an unlevel playing field." CDCs

The federal government initiated CDCs to spur economic development through small business loan 504 funding in areas that otherwise would not see much investment.

Sceranka pointed to areas like the Coachella Valley, Palm Desert and Needles.

In the middle of the decade, the federal government decided to open up the markets CDCs operated in, with the intent to reach out to underserved markets. Originally, there was only one CDC in each county, and their sole territory was their county.

Enterprise Funding, which was founded in 1983 in Upland and moved its headquarters to Redlands in 1999, was only allowed to operate in San Bernardino County until the federal Advertisement government relaxed its standards.

Since then, much larger CDCs from around the country have swooped in and dominated the marketplace.

Competition isn't what's frustrating to Sceranka and his five employees.

Serving the Inland Empire

It bothers him that Enterprise Funding is the only CDC based in the Inland Empire, where its profits are supposed to go back into developing the local community. Yet, large CDCs from abroad and upstate are making huge profits from local small business owners and benefited communities elsewhere.

"They were supposed to be benefited economically depressed areas, but instead they went into strong economic areas and neglected the underserved ones" and defeating their purpose of existence, Sceranka said.

"CDCs aren't really benefited those who they should be benefited from them."

How loans work

A CDC offers small business loans, called SBA 504s, an arrangement in which 50 percent of the loan is provided by a bank, 40 percent by the CDC, and 10 percent is fronted by the business.

The 504s don't require federal government subsidies, but they come with the proviso that the borrower must create one job for every $50,000 loaned, or one job for every $100,000 loaned to manufacturing companies.

Enterprise Funding has documented 9,353 jobs created since its inception.

A development company like Enterprise Funding only requires a minimum of 10 percent down with a 6.54 percent fixed borrowing rate for a 10-year or 20-year loan.

That compares to a minimal 25 percent down or more for most commercial loans, which carry a variable 7 to 8 percent interest rate.

"If you're trying to buy a million-dollar building, 25 percent down for a small business is huge," said Sceranka, a Redlands resident.

`A good way to finance a company'

Zephyr Sales Company, Inc. of Rancho Cucamonga was able to buy its current 10,000 square-foot building after getting funding from Enterprise. They moved out of their Ontario warehouse in 2002.

The company, which manufactures its own lines of metal polishing products for the heavy trucking industry, was also able to add four employees, including one handicapped employee from Diversified Industries of Montclair.

"We're a family-owned business. We needed to expand our manufacturing base, and Enterprise Funding has been very good to us," said Rod Griffin, vice president of Zephyr Sales Co. "Owning our own building saves us so much from having to pay rent."

When Dan Gannod opened the franchised PRstore near Vons in Redlands in 2005, he didn't know about Enterprise Funding. Enterprise Funding is now one of the marketing and public relation firm's clients.

"He didn't know about 504 funding and never heard of Enterprise Funding," said PRstore manager Kelly Donovan. "I think it's a good way to finance a company: instead of throwing all that money away on rent, you could invest in your own building."

Since PRstore has options for two more franchises, Donovan bets that the company may turn to Enterprise Funding to help them expand to other parts of the county sometime in the future.

Mark Roemmich, owner of Noble House Pictures Entertainment, Inc., received more than $900,000 to secure an 8,000 square-foot building in Ontario that would create as few as 10 jobs and as many as 80 when his film production company is in full swing.

Roemmich filmed his first film, "Taylor," entirely in the city of Redlands.

Profits and size

Enterprise Funding is the 100th largest CDC in the country, but its annual budget of $750,000 pales in comparison to the last four months' revenues of the nation's largest certified development company, CDC Small Business Financial Corporation of San Diego, which does business in the Inland Empire and made $2,565,000 in loan origination fees alone last quarter.

That $2 million-or-so - and various other profits - likely benefit the San Diego area, even if some of the small businesses in Redlands are using them.

"CDCs are very effective in giving back to a community because all their profits go back into economic programs, not shareholders," Sceranka said. "A chamber of commerce could never match what a CDC could."

If Sceranka had more business, he envisions conducting economic development or feasibility studies for the city, participating in more chambers of commerce, providing more scholarships throughout the county, and sponsoring economic improvement workshops for the community.

"Enterprise Funding responds pretty quickly to our needs," said Rick Abrego, vice president of Citizens Business Bank in Ontario. "They're more than willing to come and take over a deal and help us out; and Jeff and his staff are very knowledgeable. They stand 100 percent behind what they do."

As most large banks abandon smaller CDCs to make deals with bigger CDCs, Enterprise Funding marches on.

"We could merge and be gobbled up by a larger CDC. We could fade away and let the industry be dominated by the top 10 CDCs. Or we can fight," Sceranka said. "We think there's a benefit to CDCs and providing local economic development assistance."

E-mail Staff Writer David James Heiss at dheiss@redlandsdailyfacts.com

BUSINESSES THAT HAVE BENEFITED

Eagle Family Entertainment Center LLC, Adelanto, $1,943,000*

American Recycling Center Inc., Bloomington, $440,138

Carden Whittier School Inc., Whittier, $1,350,000

Tinker & Rasor Inc., San Gabriel, $1,340,000

Sierra Wholesale Hardware Inc., San Bernardino, $1,200,000

CMI Building Materials Inc., $1,183,000

Noble House Entertainment Pictures Inc., $946,329

Accurate Source.com Inc., Placentia, $930,000

Pizza Factory, Hesperia, $80,997

* Enterprise Funding's 40 percent share of the investment

Courtesy of Redlands Daily Facts, www.redlandsdailyfacts.com

The annual awards ceremony was held at the Riverside Convention Center on November 14th and was attended by over 550 community leaders and award recipients.

Sceranka, president of Enterprise Funding Corp., received the award among 100 nominees in various categories at the Spirit of the Entrepreneur awards ceremony.

The Supporter of Entrepreneurship award goes to an individual who has consistently given their time, energy, and expertise to assist in the development of entrepreneurs and entrepreneurial ventures.

Jeff has spent over 35 years in the Inland Empire as a small business owner, and has spent over 25 years with Enterprise Funding Corp., a non-profit, SBA Certified Development Corporation headquartered in Redlands that provides commercial lending for retail, industrial, and service industry businesses looking to expand or relocate into the Inland Empire. Sceranka was founding member of the Board of Directors since 1983 and served as Chair for over fifteen years. Enterprise Funding has approved over half a billion dollars in projects and helped to create or retain over 8,500 jobs in the Inland Empire.

Jeff has been assisting business ventures in the Inland Empire since 1969 when he was president of Lucas Land Company in Rancho Cucamonga. As a real estate broker, Jeff helped to locate businesses into the Inland Empire and was executive director of the Rancho Cucamonga Chamber of Commerce where he helped to create a number of programs to assist small and large businesses, including the SBA CDC (Certified Development Company) program of which Enterprise Funding is a participant.

Other past awards for Jeff include Realtor of the Year (1988) by the Inland Empire West Board of Realtors and Alumni of the Year (2005) by Chaffey Community College.

Redlands, CA - The U.S. Department of Treasury under the Community Development Institutions Fund has certified Enterprise Funding Corporation (EFC) as a Community Development Financial Institution (CDFI). This certification affirms EFC's mission of empowering small business entrepreneur with access to capital and technical assistance within the Inland Empire and its surrounding regions.

"Being a CDFI will increase the ability of EFC to raise economic development financial resources from the CDFI Fund Program and from other revenue sources including private as well as institutional organizations and foundations.", said Jeff Sceranka, president of EFC. "These additional funding sources will directly benefit the small business community of the Inland Empire."

CDFI's are specialized financial organizations whose purpose is to serve communities that have not been adequately served by traditional financial institutions. These CDFI's provide a wide range of financial products and services including: small business loans, mortgage financing, rental housing, technical assistance to small businesses and credit counseling to consumers. CDFI’s include community development banks, credit unions, loan funds, venture capital funds and microloan funds, among others.

EFC is a Certified Development Company (CDC) authorized to fund SBA 504 project loans within San Bernardino County and microloans within Riverside and San Bernardino Counties. Since its inception in 1983, EFC has approved over $100 million of SBA 504 loan projects. The microloan program was established in 2001 to promote entrepreneurial opportunities for low-income, women, disabled and minority-owned businesses by providing access to capital and small business technical assistance.

Sceranka, who helped create Enterprise Funding in 1983, has evolved the business from nine loans just four years ago to 51 loans this year worth $25 million. The company also recently moved into its new headquarters in the Citrus Center at 300 E. State St. in Redlands.

His upgraded six person firm plans to continue serving clients in San Bernardino County, but recent changes announced by the U.S. Small Business Adminsitration allow Enterprise Funding to review and package loans statewide.

However, Sceranka said, despite the new regulations, the firm would continue to assist small business owners in San Bernardino County. Enterprise Funding, which is an SBA-certified development center, makes loans to start-up businesses or businesses looking to modernize equipment or move into a new facility.

"It would be very difficult for us to focus on the local community if we were all over the state,'' said Sceranka, president of Enterprise Funding.

He added, "As a firm that specializes in economic development, we are committed to the Inland Empire.''

Under previous SBA guidelines, Enterprise Funding could only assist loan applicants in San Bernardino County . But because of new regulations approved last month, the firm has targeted northern Orange, eastern Los Angeles and Riverside counties for expansion, Sceranka said.

"I know that some of the four certified development companies that already operate in parts of Orange, Riverside or San Bernardino counties are now planning to expand to new areas within this tri-county region,'' said Sandy Sutton, district director of the SBA's Santa Ana district office. "Riverside County currently has only one active CDC, so it will potentially be viewed as fertile territory.''

Sutton also expected San Bernardino County, which has two active CDCs, to attract another firm into the market in the near future. Besides Enterprise Funding, Santa Ana-based Southland Economic Development Co. operates within the county.

"So far, I have only been in contact with one CDC from outside our area that has expressed an interest in coming to our tri-county region,'' she said.

Advantage CDC in Long Beach was expected to expand into the tri-county region, according to the SBA. Messages left with Advantage Executive Director Regina Peterson were not returned.

Enterprise Funding and other CDCs were established by chambers of commerce and state and local governments. Sceranka said the firm was created 20 years ago with a $50,000 loan from the county of San Bernardino.

Unlike a typical bank, Enterprise Funding puts all revenue earned from interest and fees associated with its lending into more loans. The firm offers 504 and Micro loans, which are guaranteed by the federal government.

"Our partnerships allow us to get leads on businesses that are looking to expand and a bank might not be able to help them unless we were involved,'' he said.

Sceranka said 504 loans are attractive to both small business owners and lenders by funding long-term fixed assets. The program is used to create or retain jobs and the size of the loan can range from $125,000 to $5 million.

Under the 504 program, the borrower must come up with 10 percent of the loan amount. The bank comes up with 50 percent, and the Enterprise Funding 40 percent. For every $50,000 that Enterprise Funding lends to a business using a 504 loan, the company must agree to create one job.

The Micro Loan Program offers loans from $5,000 to $25,000 and is designed to offer assistance to start-up or newly established businesses, according to the SBA.

Dr. Hendrik. J. DeJager received a 504 loan through Enterprise Funding to relocate his medical practice to San Bernardino. He hopes the new program encourages more loans.

"The program was very helpful when I needed to relocate my practice after 27 years at Loma Linda University,'' he said.

Hendrik, who moved into his new office at 1850 S. Waterman Ave. in June, said without the loan his practice could have been severely damaged.

"My only alternative was to sign a five-year lease in Redlands,'' he said. "My patients come from all over. To have a place so close to the freeway has been a lifesaver.''

Ray Products. Co. Inc. recieved a $700,000 loan from Enterprise Funding to help it move to Ontario in 1995.

Ray Products founder Bruce Ray said the loan is what made the difference in his company's success.

"We grew substantially once we moved from El Monte,'' he said. "Today, we have about 45 employees.''

The 504 is the SBA's most popular and resulted in a record $3.2 billion in loans during the fiscal year that ended Oct. 31, according to federal statistics. However, the agency had the authority to offer an additional $1.3 billion in loans.

Since it began in 1986, the 504 program has created or retained more than 1.5 million jobs nationwide, the SBA said.

As for Enterprise Funding, Sceranka's ambitious plans call on the firm to hire three more full-time staff and reach $50 million in loans by the end of next year.