Local loan agency thinks small
By Dan Nakaso
Advertiser Staff Writer
Cathy and Bong Ho Lee couldn't get a conventional business loan to buy the land beneath their auto body shop, and turned to David Perkins with a request born of desperation.
Jeff Widener • The Honolulu Advertiser
"I ask David Perkins, 'Please help us buy this land,'" said Cathy Lee, 51. "'We take care of it really good.'"
A loan from the HEDCO Local Development Corp. allowed Mary and Eric Bello to buy the 3.7-acre Wahiawa Industrial Center where they had been renting, cutting the down payment and making them landlords.
The Lees emigrated from Pusan, South Korea, in 1981 and settled in Hawai'i, looking for a better life. They bought an auto body repair business in Mapunapuna with leasehold payments that eventually rose to $14,000 a month.
Last December, Perkins — president of the nonprofit HEDCO Local Development Corp. — helped the Lees get a $2.5 million, 20-year loan to buy their fee. The loan made the Lees one of 38 small businesses in Hawai'i to get a record $16 million worth of loans through the local development corporation, an affiliate of the Hawaii Economic Development Corp.
Spurred by low interest rates, greater awareness among Hawai'i banks and a more aggressive attitude by HEDCO Local Development Corp. officials, the program had its best year ever for the fiscal year that ended Sept. 30.
For 30 years, HEDCO LDC has helped small businesses like the Lees' Victory Auto Body Shop. But lately, the soft-spoken Perkins said, "we've been a lot more aggressive in trying to get the word out to the public."
The previous record year for lending was 1999, when the organization helped 22 Hawai'i small businesses get $6.5 million worth of loans.
HEDCO LDC is licensed and certified by the Small Business Administration as one of 270 Certified Development Co. (504) Loan Programs around the country working with traditional lenders to obtain loans for small businesses that otherwise would not qualify.
However, the HEDCO LDC loans aren't for everybody.
They're only granted for fixed costs, to pay for such things as land, buildings, construction, renovations or long-term machinery and equipment.
Those who do qualify get a smaller down payment and a fixed interest rate on a 10- or 20-year loan.
For more information, contact David Perkins at 521-6502, ext. 1 or dperk@lava .net, or Kali Tarnay at 521-6502, ext. 2 or kalit@lava.net.
A small business seeking a $1 million loan, for instance, would need only a 10 percent down payment. A traditional bank would then finance 50 percent and HEDCO LDC would come up with the remaining 40 percent.
HEDCO Local Development Corp.
A HEDCO LDC loan made it possible for Eric and Mary Bello to buy in April the 3.7-acre industrial park where they had been renting space for their Bello's Millwork, which fabricates wooden doors, windows and crown molding.
The lending formula gave the Bellos a much smaller down payment on their $3.5 million loan, and made them landlords to five other businesses in their Wahiawa Industrial Center.
"We were really fortunate," Mary said. "The interest rates happened to be good, and it was just a good business decision."
HEDCO LDC loans also gave birth to Robert Bedard's dream of starting his own art studio in Lahaina, Maui, at the age of 49.
Bedard wanted to move beyond his screen door fabrication and repair business, so he applied for loans to build an art studio. Bank loan officers kept steering him to HEDCO LDC.
"With banks, normally you have to prove that you don't need the money in order for them to give you money," Bedard said. "But David (Perkins) and his folks, they really want to help you. They don't take a hard line. They do require a lot more paperwork, but they come through."
Bedard obtained a $400,000 loan at 4.187 percent interest over 20 years. It was enough to build two 1,200-square-foot industrial bays above the Lahaina Safeway.
From his "Robart" studios, Bedard paints Hawaiian landscapes and portraits and organizes programs to teach art to Maui children.
"I'd never heard about HEDCO before, but I wish I had," Bedard said. "They carry clout, with the backing of the federal government behind them. But they don't carry a big stick. Now I'm able to see the accumulation of my whole artistic life — or the beginning of it.
"That loan brought it all together."
A HEDCO LDC loan made it possible for the Lees to ease more comfortably toward retirement.
They had rented their 49,520-square-foot property since 1983, where Bong Ho, 53, leads a group of five employees fixing banged-up autos.
The Lees' $14,000 monthly lease was coming up for renegotiation when they tried — without luck — to get a bank loan to buy the land.
A bank loan officer referred them to HEDCO LDC, and now the Lees pay a monthly mortgage of $15,700, which is in the ball park with what they paid in rent — except that in 20 years they'll own the property.
"We came to U.S. looking for a better living," Cathy Lee said. "Now we're going to retire at this place."
Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.
