Helping businesses grow, stitch by stitch

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It doesn't seem like much: A new sewing machine, $150 to help pay for it.

But for Omaha custom dance costume maker Leafy Largent, it's an important step toward keeping a small business growing. This is one of the busiest times a year for her company, L.E.L. Enterprises. Demand for her costumes has been going up for the last few years, despite the recession — she figures parents will do just about anything to keep their kids happy —and she's been steadily increasing her number of employees and machines.

So when she heard about an unusual grant program from the Nebraska Investment Finance Authority, aimed at spurring growth by helping businesses modernize their equipment, Largent figured it couldn't hurt to apply.

"Like any business, if I have three machines, I can have three employees," she said. "If I have four, I can have four employees. That's the idea in growing the economy, to have more jobs."

It's also the goal of NIFA's Nebraska Asset Modernization Initiative, which the organization rolled out in June. Since then, NIFA — an independent, quasi-governmental agency that functions as an investment bank for Nebraskans — has allocated $196,366 for businesses across the state.

But it still has more to give. In total, NIFA has set aside $1 million to hand out before the end of the fiscal year, in June 2012. The money for the program comes from the sale of bonds.

Businesses can apply for a direct grant of up to $30,000 or up to $25,000 to be used as collateral on a bank loan. Eligible firms must have operated in Nebraska for at least five years, and the money has to be used to purchase equipment that was made after 2005.

Tim Kenny, NIFA's executive director, said the program is aimed at businesses that have somewhere between five and 100 employees — the kind of companies where a new piece of machinery can be crucial to staying competitive.

NIFA has been around since 1983, but this is the first time it has offered manufacturing grants.

"We wouldn't do this in good times, in the times where everyone is confident and happy," he said. "This is something we especially rolled out to help transition from a lack of confidence to confidence. To help increase high-value investments, which stimulates the economy."

So far, all of the businesses that have applied for the program have opted for the direct grant. They receive 6 percent of the total cost of the purchase, with a limit of $30,000.

A half-dozen of those firms are located in Omaha, but the rest are scattered across the state, from Gurley to Grand Island, South Sioux City and Geneva.

In Minden, Neb., Minden Machine Shop President Larry Lempka said he found out about the NIFA program just as he was making plans to order a new $2 million laser cutting machine. The $30,000 he'll receive will cover only a small part of the purchase, but he said he's happy to be able to spend that amount on some other aspect of the growing farm equipment manufacturing business.

"It's one of those things where as a businessman, if you want to be competitive you've got to look at everything you can," he said. "I can take that $30,000 and give it to my employees. I've got to do everything advantageous to my company."

Minden Machine Shop has 48 employees, up from about 18 just five years ago. Lempka said he'd hire another six welders but has trouble finding qualified applicants. The company has expanded its facilities in recent years and he said the new machinery is part of that broader growth.

Universal Pasteurization, a branch of Universal Cold Storage in Lincoln, is also getting $30,000 to help with the purchase of a $2 million pasteurization machine that keeps contaminants out of meat products.

Owner John Jacobsen said adding a new machine means his company can hire 10 more workers. The $30,000 he'll save will go toward training for his employees.

Kenny said his group aimed to make the program as simple as possible, as another way to get businesses interested. He said a small bit of help can be all it takes to get people interested in investing in their business. The money allocated so far will help fund a total of $5.3 million in equipment investments.

"It's just that little incentive ... what does it take to tip you over to make that decision," he said.

NIFA plans to hand out an additional $500,000 in the next fiscal year. Any money that isn't awarded this year will be rolled over for later use.

For her part, Largent said she's up to her highest number of employees ever: six. She said she's pleased to see someone looking out for businesses like hers, with room to grow.

"It's the smartest thing I think I've seen the government do to increase jobs," she said.

Contact the writer:

402-444-1543, erin.golden@owh.com

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