Santa comes early to small business owners in Oregon; Wells Fargo Bank joins state lending program

Business Wire, Dec 20, 1996

LOS ANGELES--(BUSINESS WIRE)--Dec. 20, 1996--Santa has more capital, not lumps of coal in his sack for small business owners in Oregon.

Wells Fargo Bank, the nation's largest lender to small business, is now a participant in the Oregon Economic Development Department's Capital Access Program.

Enacted by the State Legislature in 1989, the Capital Access Program allows small businesses that do not otherwise qualify for conventional bank funding to get loans.

"Participating in the Capital Access Program allows Wells Fargo to cover an even greater number of small businesses needing money to grow and expand," said Dave L'Roy, who manages the program for the bank. "Young and growing businesses often have difficulty getting credit when their profitability is fairly recent. The beauty of this program is that `near bankable' businesses can get lines of credit as well as term loans."

Since 1989, more than 1,000 loans totalling $37 million have been made by the program which currently has 26 lenders enrolled. To be eligible, businesses must have at least half of the total revenues of the company generated in Oregon or at least half of the total jobs of the business created or retained in Oregon.

"We are delighted that Wells Fargo will participate in the Oregon Capital Access Program," said Mark Huston, business finance manager for the Economic Development Department. "More small businesses will be getting credit, and that's very positive for the State's economy."

The Capital Access Program doesn't guarantee loans, it insures them through a process that works like this:

The small business borrower pays a standard loan fee, a risk-adjusted interest rate plus a Capital Access fee. The Capital Access fee is paid into a reserve account owned and administered by the State.

Wells Fargo, the lender, also pays a Capital Access fee and the Oregon Economic Development Department matches both bank and borrower contributions to create a reserve ranging from 8 percent to 14 percent of the loans made under the program. The co-funded loan loss reserve is sued to cover losses on loans made under Capital Access.

Wells Fargo Bank is the principal subsidiary of Wells Fargo & Co., the eighth largest bank holding company in the United States with assets of $109 billion at Sept. 30, 1996.

CONTACT: Wells Fargo Bank, Los Angeles

Kathleen Shilkret, 213/253-7198