Quantcast
StarBulletin.com

Feds say stimulus is expected to generate 15,000 isle jobs


By

POSTED: Sunday, August 02, 2009

A new senior care home in Kailua plans to hire 20 employees, and a cafe-bar in Chinatown hopes to employ 10 workers, with financial help under the federal economic stimulus plan.

The American Recovery and Reinvestment Act of 2009 is beginning to give qualified businesses as well as some homeowners a new start across the state, with loans, contracts and grants.

Federal officials estimate the stimulus plan for Hawaii will generate 15,000 jobs.

More than 50 enterprise loans totaling more than $4.55 million have been guaranteed in Hawaii under the federal stimulus plan, according to the Small Business Administration in Honolulu.

Of the $1.36 billion announced for Hawaii, $618.9 million has been made available and $160.1 million has been doled out, according to the federal Web site http://www.recovery.gov.

Mark Anderson, deputy director of the state Department of Business, Economic Development and Tourism, said only part of the federal money released to the states has been reported on the recovery.gov site.

Anderson said the states, including Hawaii, are to provide a full accounting in October, enabling the public to get more details about federal stimulus spending.

The Hawaii loans touched by stimulus plan have included a $1.54 million for an adult care home and $15,000 for a business selling tropical fish.

Honolulu entrepreneur Brandon Reid said he certainly received a boost when his boutique cafe the Manifest received federal stimulus help for a $56,700 loan with an interest rate of about 5.5 percent, well below market rates.

Reid, whose parent business is called “;Puka Panty LLC,”; said he had been denied a bank loan because of a personal bankruptcy in 1989.

But he went to the Small Business Administration earlier this year and was able to get the loan under the federal stimulus plan. “;It was a stroke of luck,”; he said. “;It's quite tremendous that the government was behind me.”;

He said the Manifest, catering to the downtown commuter crowd by day and events at night, plans to open in a few days.

Across the street, the principal owner of thirtyninehotel, Gelareh Khoie said she thinks the addition of more businesses in Chinatown is good.

“;The more the merrier,”; she said. “;It increases jobs, stimulates the economy. It's positive.”;

Shelly Wilson, president of Wilson Homecare, said she was applying for a $1.5 million loan through the Small Business Administration to develop a senior care home, when federal stimulus benefits became available.

Under the stimulus plan, one-time loan fees from the bank and Small Business Administration totaling 2 percent were waived for her and she received a loan with an interest rate around 6 percent. “;We received very very favorable interest,”; she said.

David Perkins who works for a nonprofit that processes SBA loans said the 2-percent fee waiver which ends this year has helped both lenders and borrowers. “;Everybody wins in this case,”; he said.

Karen Sakihama, the SBA's acting district director in Hawaii, said under the federal stimulus plan, the SBA has received $730 million nationally and is offering a guarantee of up to 90 percent, rather than 85 percent of a loan up to $150,000.

Loans greater than $150,000 receive a guarantee of 90 percent, rather than the usual 75 percent, she said.

Normally, the SBA charges banks a fee of 1.5 percent to 3.75 percent up front for a loan guarantee, depending on the type of loan and dollar amount.

Sakihama said in the case of Reid and his prior bankruptcy, issuing a loan hinges on a number of factors, with credit being one of them.

“;If he has rebuilt his credit and can also explain the reasons for his bankruptcy, it's an issue that can be overcome,”; she said.

She said the SBA also looks at the nature of the business and the applicant's experience.

The stimulus plan also has allotted more than 12 contracts in Hawaii, including $11.3 million to Hawaiian Dredging Construction Co. where officials plan to hire 25 to 30 people through May 2010.

More than 86 grants have been allotted for Hawaii, including $41.9 million committed in April to the Med-QUEST Division.

The $41.9 million included about 55 percent in usual federal matching funds, in addition to the nearly 14 percent from the stimulus plan.

Sam Slom, president of the business advocacy group Small Business Hawaii, said businesses have told him getting a loan is still difficult and the federal government is “;way behind”; in its stimulus distribution.

Slom, a Republican state senator, said stimulus funds are also increasing government debt and taxes.