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City awards second Start-up Grand Forks loan

A behavioral health therapist with nearly 10 years of experience in the public sector said there's a shortage in regional mental health services.

"There's about 70,000 people in this kind of business area here," David Scott said, estimating there's only about 130 therapists locally. "And 130 clinicians for 70,000 people is pretty low. Because we know statistically about anywhere from 10,000 to 12,000 of those people are going to need services at any given year."

Earlier this year, Scott moved into a shared building called the Zone, where he runs his own practice and sees anywhere from 20 to 28 patients a week. He wants to start seeing 30 to 35 patients a week, he said, but equipment and administrative costs are adding up.

One bank had already declined Scott a loan due to a lack of private sector experience when he first heard about Start-Up Grand Forks, a three-year pilot program the city created in 2017 to provide loans for local up-and-coming entrepreneurial projects.

Brandon Baumbach, business development manager for the Grand Forks Region Economic Development Corp., said the city can give up to $100,000 in growth fund loans per year, with the Bank of North Dakota matching each loan one to two. Applicants can apply for loans as high as $30,000, $20,000 of which the city covers, with the first year deferred.

"It's inclusive of all types of companies," Baumbach said of the program, adding he's talked to everyone from retailers to inventors. "But we do require a little bit of homework."

The process

Before submitting anything, applicants must consult with the North Dakota Small Business Development Center, which Baumbach said is free for anyone exploring a business. Then, applicants must file with the state of North Dakota and send Baumbach a business plan.

With Baumbach's guidance, applicants move onto a local committee of eight entrepreneurs who review an idea.

"Kind of like 'Shark Tank,' " he said.

After doing all that, Scott received final approval from the Job Development Authority Monday.

The process takes about five to seven weeks to reach approval, Baumbach estimated, depending on how fast he can schedule a shark tank meeting before the JDA convenes.

Scott's $20,000 start-up application was the second the city approved this year.

"The beautiful thing about this program is even though we've only gotten two applications, I've had the opportunity to meet with a dozen people who have come out of the woodwork, out of their basements, out of their garages tinkering and they say, 'Hey, you know what? I've been thinking about this business for a while. What do you think?'" Baumbach said.

The first application the city approved last August was a $10,000 loan for Auto-Pilot Medical Technologies, which returned the loan after relocating to Fargo.

"We're trying to start businesses here in Grand Forks," Baumbach said. "Things that could really scale and sell outside of the region and really have the opportunity to create jobs in Grand Forks."

Scott's clinic differs from some businesses, Baumbach said, in that it offers a "much-needed"

service.

"The need is high, and we don't have enough clinicians that do the work to satisfy the need," Scott said.

"Is he going to hire a lot of people? Maybe, not likely," Baumbach said. "Is he going to be able to sell that service outside the region? Even less likely. So there's a diversity, in that way."

For this year, Baumbach said there's still about $84,000 remaining for loans.

Emily Allen

Allen joined the Grand Forks Herald to cover local government and politics May 2018. Call her at 701-780-1102, email her at eallen@gfherald.com or follow her on Twitter, @Emily_theHerald.

(701) 780-1102
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