The Spokane Intercollegiate Research & Technology Institutes foundation has launched a $3 million fund through which it will provide financing to technology companies in Eastern Washington.


The fund, called the Technology Growth Fund, will provide short-term loans to tech companies that dont qualify for loans from commercial banks or the U.S. Small Business Administration (SBA), says John Overby, client services director at SIRTI.


Such companies typically have a patentable product, but have yet to achieve the level of profitability that banks require before theyll make such loans, he says. Companies could use the loans to buy more equipment, build up their liquid assets, or consolidate debt, among other things, he says.


Were at the next-highest risk level, Overby says. The goal is that companies will become bankable in a couple of years for commercial loans.


Loans from the fund typically will range between $50,000 and $350,000, he says. The SIRTI foundation is focusing on young technology companies, although it hasnt rule out providing loans to startups. For the purpose of the program, any company that focuses on technology-related products or services might qualify for a loan, he says.


The programs interest rates havent been set yet, and could vary from applicant to applicant, but will be slightly higher than the SBAs rates for its programs, Overby says. The two types of loans really arent comparable, because the companies that qualify for the foundations program otherwise wouldnt be able to get financing at all, Overby contends.


The SIRTI foundation received a roughly $1.5 million grant from the U.S. Economic Development Administration (EDA) in 2004 for the Technology Growth Fund, he says. The EDA required the foundation to raise matching funds for that grant, and the foundation obtained those funds about a year ago from the Business Development Corporation of Eastern Washington (BDC), which is an investment group of local and regional banks and businesses. The EDA also required the SIRTI foundation to draw up an administrative plan for the fund, which it paid for with a grant from Spokane Teachers Credit Union, Overby says.


The BDC will administer the loans, while the SIRTI foundation and SIRTIs staff will help select loan applicants. The foundation and BDC will co-own the loans.


We bring our knowledge of how to assess high-tech companies, by looking beyond financial statements to see the value of their technology, Overby says.


So far, three companies, which already are SIRTI clients, have applied for loans, he says. The foundation isnt releasing those applicants names. Some of the requirements that applicants must meet include having a comprehensive business plan, having a Washington state business license, being based in one of 10 Eastern Washington counties, and demonstrating that conventional bank financing is unavailable.


Contact Emily Brandler at (509) 344-1265 or via e-mail at [email protected].