Ka Wai Ola - Office of Hawaiian Affairs, Volume 8, Number 8, 1 August 1991 — Hawaiian business loans still available [ARTICLE]

Hawaiian business loans still available

by Christina Zarobe Assistant Editor Although funding for the Office of Hawaiian Affairs' Native Hawaiian Revolving Loan Fund program is limited, those interested should still apply, according to Ken Sato, fund manager. The program, whieh is funded by the Administration for Native Americans and administered by the Office of Hawaiian Affairs (OHA), provides loans to Native Hawaiians who want to start or expand an existing business. The five-year demonstration project was started in 1987 and is scheduled to end in November 1992. OHA received a nearly $3 million grant and began lending money to approved business people in September 1989. As of June 30, about $500,000 is left out of the original grant, said Sato. "We just want to make them aware that there are very limited funds now. But they should continue to apply."

Since the program was launched 65 firms have received loans, Sato said. Of that figure, 40 percent were new businesses, while the other 60 percent were companies that already existed. "It provides funding for people who are not able to get conventional loans. That's what makes this program special," he said. The kinds of businesses receiving loans varies widely from commercial fishing and computer repair to restaurants and taro farming. Loan officers with OHA meet with potential loan recipients, and visit the businesses as part of the loan process. A loan review committee consisting of three individuals with financial expertise evaluate eaeh loan whieh has been recommended by loan officers for approval. Loan requests that meet program requirements and are considered viable are then submitted to an advisory board of directors. These individuals are affiliated with lending resources, business

technical assistance providers or own small businesses. The Native Hawaiian Revolving Loan Fund Advisory Board makes the final decision on whether to approve the loan, according to Sato. But starting a business in today's economy ean be a formidable task. Nationwide, 85 percent of new businesses will fail in the first five years of operation. As of June 30, there have been 3,2 10 inquiries to the Native Hawaiian Revolving Loan Fund. The most loan requests have eome from O'ahu followed by Hawai'i, Mau'i, Kaua'i, Moloka'i and Lana'i. And with the decrease in the number of loans being approved by conventional institutions, the program's value is increasingly important to the Hawaiian community . "It's tougher now for people to get a loan. People are tightening up on credit," Sato said. The Native Hawaiian Revolving Loan Fund project is part of OHA's Eeonomie Development Division.