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Wednesday, March 18, 2015

Business owner asks for MD of Pincher Creek participation in Community Futures business improvement loan program

Chris Davis

Beaver Mines Store proprietor Jacques Thouin appeared before council for the MD of Pincher Creek No. 9 as a delegation on March 10 to ask council to consider joining the Community Futures program so that he could apply for a business improvement loan with that organization.


In an email to councillor Garry Marchuk (who represents Division 3, which includes Beaver Mines) Thouin said "The Beaver Mines store desperately needs improvements after 30 years of operation".  It went on to say that this would be a good time to do the work, since the premature closing of Castle Mountain this winter has made for a "dead season".  He said getting a Community Futures loan would give him and his wife an incentive to start renovations and employ local tradesmen, carpenters, electricians,  plumbers, etc. Thouin told council that would be good for his business and good for the Beaver Mines community.  "We certainly could use the help for our business, concerning renovations.  I think it would be nice if council would support our kind of business."

"This kind of support from council would go a long ways in promoting small businesses that are involved in... specially tourism, as far as we are concerned, but also ranchers and other industry like Shell.  We do support a wide variety of interests in the community."

Also in attendance was Community Futures Alberta Southwest Manager Tony Walker. Thouin invited Walker to also speak to council as part of his delegation. Walker previously appeared before this council "last year about this time" to explain how Community Futures works. At this meeting he focused on how their Business Improvement Loan program works. "We provide interest-free loans to business owners up to $10,000 and the loan interest is paid by the municipalities." Walker said the Town of Cardston, the Town of Pincher Creek, and the Village of Glenwood have all signed letters of agreement to participate in the program.

"Currently the loans are done at Prime plus 3 (%)... the interest is calculated and paid at the time the loan is approved and the municipality is the one that can decide what the loans can be used for so that it's tax assessable improvements and things like that."  Walker explained a brochure handed out to council that gave a breakdown of an example loan.  "If the loan goes bad that's no repercussion to the municipality.  We try to secure the loan with a security agreement and a personal guarantee, and if the loan is paid off early and we save some interest we would issue a cheque back to the municipality.  So that's the details that are in the letter of understanding, like I say, all it takes is for us to agree."

Councillor Garry Marchuk asked if the funding could be used for any purpose.  "We do them as improvement loans," Walker replied.  "We've done about four or five now.  Most people are improving the entrance way or the roof or the furnace, or something that falls under the category of business improvement, but it really could be software, it could be computers, anything that really improves the efficiency or the customer service experience for the business."

Marchuk also asked how the program benefitted the municipality. "We took this program from the City of Lethbridge and the Community Futures office in Lethbridge," replied Walker.  "They had the program, they were trying to revitalize the downtown, that's where this program kind of spawned from.."

"I think it helps in that is brings in tourism, the businesses may not consider doing it otherwise, specially if it's just cosmetic, may let it go for another year or two or three until they could borrow the money at a good rate. So it really is access to financing at a very reasonable rate, 0% interest to them."

Reeve Brian Hammond asked Walker if there were any examples of a rural jurisdiction's involvement in the program over the course of several years. Walker said the Village of Glenwood was the only such example, where a loan of $1000 was approved."

"This program is fairly new and we're just trying to get all of the other communities onboard.  We've promoted it in the other municipal districts."

"Who approves people?" asked councillor Fred Schoening.  "We would," replied Walker. "We would do our due diligence on the owner's personal financial statement to make sure he has the ability to repay the loans, and the only thing we would require from the municipality is proof or confirmation that the business is an MD approved business."

"If you wanted to gear your loan program towards something specific then we would accommodate that."

"This issue I'm finding here, that I kind of have with this, is not what we gear it toward but it's decided if you approve the loan then all that we can do is decide what the loan will be used for, not whether or not it's approved or not," said Schoening.

Walker clarified that the MD would set the limits.

Councillor Marchuk asked if the program could be accessed by bed and breakfast operations. "As long as he's a licenced business within the municipality," replied Walker.  

Reeve Hammond told Thouin and Walker that the issue will come back to the next meeting of council for a decision as to whether or not the MD of Pincher Creek would sign on to the program.

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