City and Business Development Finance Corp. to Fund Eller College Student Start-ups

Feb. 13, 2001

The Business Development Finance Corp. (BDFC) plans to allocate $250,000 to finance the implementation of business plans developed by students in the Berger Entrepreneurship Program at the Karl Eller Center (KEC).

Richard Jeffrey, vice president and chief credit officer of BDFC, made the announcement Feb. 12.

BDFC, with offices in Tucson and Phoenix, is an economic development lender focused on financing expanding Arizona businesses. The company sells government guaranteed debentures and lends the proceeds.

The corporation contracts with the City of Tucson to manage a pool of $4 million to make small-business loans to expanding businesses within the city limits. Loans generally amount between $10,000 and $100,000.

The Karl Eller Center, in the University of Arizona's Eller College of Business and Public Administration, came to the corporation's attention when it funded a loan for Hear's Music. The initial business plan for Hear's Music was developed by Britton Dornquast when he was an entrepreneurship student in the Karl Eller Center.

"That was a very positive experience for us and we took a closer look at what the Karl Eller Center is accomplishing. Our new loan program reflects our confidence in the KEC and the Eller College," said Jeffrey.

The KEC will pre-screen student business plans. Students will make a formal presentation as a loan request. Businesses must be established within the city limits of Tucson and the maximum amount of any loan will be $100,000. "This is not a grant, but an actual loan," Jeffrey emphasizes.

The program is unique because BDFC usually funds existing businesses. This is its first program funding start-up companies.

Jeffrey notes that BDFC will consider additional allocations to the program. "We would like to see other Arizona lenders contribute to the funding for this program, as well," said Jeffrey. "It is not easy for start-up companies to get loans. These students have an edge because they have been through a rigorous program and the plans selected for loans have a high probability of success."

Existing Arizona businesses interested in learning more about BDFC's loan program can contact the organization at 520-623-3377.


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