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Loans aid female- and minority-owned firms

June 12, 2009|By HEATHER KEELS

HAGERSTOWN -- Two Hagerstown businesses were the first to benefit from a new state program that helps banks provide reduced-interest loans to minority- and female-owned businesses, government officials announced Friday.

Stamper Builders, a general contracting business owned by Milton Stamper, a Cherokee Indian; and Amtrac Railroad Contractors of Maryland, owned by Jacqueline L. Manzini, each obtained loans in May from Hagerstown Trust through the Maryland Linked Deposit Program.

Hagerstown Trust and the two businesses were recognized by state officials Friday afternoon at a ceremony at Hagerstown Trust's main branch at 83 W. Washington St. in Hagerstown.

Under the program, a bank provides a loan to a certified Minority Business Enterprise at a rate 2 percent lower than the bank otherwise would charge. In return, the State Treasurer's Office purchases from that bank a certificate of deposit in an amount equal to the amount of the loan and accepts a 2 percent reduction in the interest rate on the certificate of deposit.

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"It's a tight economy and businesses are having a difficult time accessing credit," said Luwanda Jenkins, secretary for the Maryland Office of Minority Affairs. "This is a very unique and timely program to allow businesses that support the economic engine of our state to have access to capital to work on wonderful projects that benefit all of us and add to our quality of life."

Hagerstown Trust is one of six financial institutions in the state participating in the program.

Judy Greenwald, senior vice president of commercial banking at Hagerstown Trust, said the bank was looking for ways to bring in low-cost deposits when it heard about the new program in January. Greenwald and her colleagues approached Stamper, a longtime Hagerstown Trust customer, who readily agreed to be a "guinea pig" for the program, she said.

Stamper Builders will save $20,000 per year for 10 years by rolling several loans into a new loan with the reduced rate, Greenwald said.

Stamper said that savings was a big help for his 15-person company, which had been struggling due to a slowdown in construction activity.

"It's made it to where we'll be able to survive," Stamper said of the interest rate reduction.

Manzini, whose company constructs and maintains railroad tracks, said her business, too, had been hurt by the economy.

"We've been in business 21 years and this is the hardest year we've ever had," she said.

Amtrac Railroad Contractors of Maryland is saving more than $8,500 per year through the program, Greenwald said.

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