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Business loan paved success for clothier

Change is inevitable for most businesses and often a necessary part of survival.

When Lisa Swarthout started her Mill Street Clothing Company in downtown Grass Valley in 1989, she found success, but by the year 2000, realized her women’s store needed a boost.

“Women want selection,” said Swarthout, who was in a 1,000 square foot space on Mill Street when she got the opportunity to expand to more than 3,000 by renting half of the old JC Penney building down the block. “I had to fill the store.”



To do that, Swarthout turned to the city’s Business Financing Community Loan Fund for small firms.

It was four years prior to Swarthout being elected to the City Council when she got the loan, and her ties to the city did not land her the money, she said.




“If I had applied for the loan today, I would not have been eligible,” the vice-mayor said. “I have also never served on the loan committee,” of local business and city officials which handle the program.

Once she filled out a financial intent form, the full loan request was recommended by the committee to the City Council and the Sierra Economic Development District. The district underwrites the loans through state grants and all parties agreed to give Swarthout $75,000 to expand her business.

“It’s a lengthy process,” Swarthout said, that took about six months. “I had to give a lot of financial information to them, a cash flow sheet, tax returns, orders for the merchandise,” and a business plan among other things.

“I still would have probably expanded, but I wouldn’t have been able to get to this level without it,” Swarthout said. “The investment the city made in me was $75,000, but the city will get back $150,000 with interest and I’ve more than doubled my business.”

The clothier also created jobs with her expansion going from one full-time and one-part time employee besides herself to two full-timers and four part-timers.

“The key is retaining or adding jobs,” said Joe Heckel, the city’s Director of Community Development who administers the small business loan program for the city with the loan committee. “We try to pattern the loan to the needs of the business.”

Through the years the city has handed out about 20 loans through the program for a few million dollars, Heckel said, “For everything from facade rehab of a building to business assistance. The most common loan is about $100,000, but we can go to $2.5 million.”

Any kind of business within the city limits is eligible for the loans, Heckel said, and others who have received them include Cirino’s Italian Restaurant, Tripps Auto Body and Paint Shop, and motorcycle parts manufacturer motive and BUBS Enterprises. All principal and interest goes back into the loan fund for future loans.

The loan program is another way to keep downtown vibrant and keep storefronts filled with viable businesses, Swarthout said.

“My payments are a little less than $1,000 a month,” said Swarthout, over 10 years. “The best thing I ever did was move into this space. I’d probably be out of business if I hadn’t.”

And how is business?

“Downtown it’s still pretty good,” Swarthout said. “Contrary to the gloom and doom you here, people are spending, but just not as much.”

To contact Senior Staff Writer Dave Moller, e-mail dmoller@theunion.com or call 477-4321.


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