Oregon lawmakers approved a bill to change the Entrepreneurial Development Loan Fund and increase the maximum loan amount to $1 million. The bill now awaits the governor’s final approval.
This loan program is administered by Business Oregon and has a current cap of $100,000 per loan. The change also boosts the maximum annual revenue limit for loan eligibility from $500,000 to $1.5 million, according to the staff summary of House Bill 4015.
The bill was backed by several business groups including Oregon Business and Industry, an organization that represents more than 1,600 businesses.
“Entrepreneurial initiative is at the heart of business startups and is vital to growing a healthy, thriving and innovative economy. Entrepreneurial ventures often attract the best and brightest talent, which in turn attracts new investments and new talent in a perpetual cycle of synergistic growth. Often, however, the basic working capital needed to propel entrepreneurial ventures through early phases is difficult to access through traditional bank financing,” wrote Scott Bruun, director of tax, fiscal and manufacturing policy for OBI in written testimony supporting the bill.
The bill addresses access to capital issues that are often acute for entrepreneurs who can lack the revenue, balance sheets or track record needed for traditional bank lending. That challenge is even larger for entrepreneurs and small business owners who are from marginalized communities. This is a topic the business journal has covered extensively.
This bill also directs Business Oregon to adjust maximum loan amounts and revenue limits in line with changes to the Consumer Price Index. It also allows companies with fewer than 25 employees to use that characteristic as an alternative requirement for eligibility.
A third piece of the bill is an amendment to the required amount of equity that a business much provide for loan eligibility.
Changes to this program were first implemented on an emergency basis in 2020.
“We know that access to capital can determine whether a small business has the resources they need to thrive,” said Sen. Kathleen Taylor (D-Portland), chair of the Senate Committee on Labor and Business in a written statement. “By supporting small business growth, we’re taking steps to promote the creation of family wage jobs and creating opportunities for Oregon’s working families to get ahead.”
The bill passed the Oregon House on Feb. 11 by a 53-1 vote. It passed in the Oregon Senate 23-4 on Tuesday.
