Spokane’s totally tech-focused loan program, after a quiet beginning, is close to firing on all cylinders this spring, its managers say.
The Sirti technology growth fund, which has $3 million for small and growing technology firms, has become the go-to resource for cash-strapped entrepreneurs in North Idaho and Eastern Washington.
The revolving loan fund was seeded in 2006 by a $1.5 million grant from the federal government. That grant required a matching $1.5 million fund from the Spokane-based Business Development Corp. of Eastern Washington, a separate financing entity that helps companies that can’t obtain regular bank financing.
All loans come half from Sirti’s federal grant and half from the business development corporation.
Six tech firms have borrowed just under $2 million from the fund. Four firms have begun repaying loans, with two ready to start repaying in the next few months, said Tim Williams, financial services director for Sirti.
Repayments are divided equally between the Sirti fund and the Business Development Corp.
Five other tech firms have teed up an additional $1.4 million in growth loans, said Linda Hemingway, director of communications and marketing at Sirti.
Loans range from $50,000 to $500,000.
One of the six companies is Moscow, Idaho-based Ivus Energy Innovations. Its CEO, David Alexander, said the company’s $370,000 loan is helping it to roll out its first product, a high-tech flashlight called the UC3.400, which will be sold to law enforcement and emergency service agencies.
Ivus’ flashlight, which recharges ultra-quickly and is based on ultracapacitor technology, has 20,000 pre-orders. It will ship the first units this spring.
Kevin Cable, who heads the Sirti Foundation, which manages the loan program, said the economy has left area tech firms few choices for obtaining capital.
With banks holding back loans for startups and venture-capital funds “falling off the cliff,” the Sirti growth fund helps early-stage tech companies “needing extra gas in tank to get where need to be,” said Cable, a partner in West Coast investment bank Cascadia Capital.
The other companies that obtained loans are Sandpoint-based GeoData Systems and Spokane firms GenPrime, Solarmation, Pacinian and IBQ Systems.
To discourage unqualified applicants, the fund requires a startup to be involved in technology innovation, to have a connection to Sirti or one of its tenant firms, and have a cash flow or prospects showing it can repay the loan.
Only two companies that have applied for funds have been denied, Williams said.