FORT COLLINS, Colo. – The Colorado State Forest Service and its economic development partners with the Upper Arkansas Area Council of Governments are providing loans to Colorado’s forest products businesses affected by the coronavirus.
Authorized by the Colorado State General Assembly in 2009, the Forest Business Loan Fund has provided $5 million in loans to date to small forestry and wood products businesses in Colorado. In recent months, it has offered critical support to businesses affected by the coronavirus that may not qualify or have access to traditional sources of financing.
“Since the onset of the pandemic, we’ve received over a million dollars in new requests for financing through the loan program from businesses in northern and southwestern Colorado,” said Tim Reader, wood utilization and marketing specialist for the CSFS. “Our forest products and hazardous fuels mitigation businesses continue to operate, and the financing they receive through the program is helping them employ recently unemployed workers, purchase new timber harvesting or manufacturing equipment, develop new products and meet other working capital needs.”
Reader said that, for example, one applicant is seeking to hire new workers and purchase new logging equipment in order to continue to provide, economically, a supply of wood to another sawmill facility in southwestern Colorado.
“Due to COVID-19, some of our forest product companies here in Colorado have seen a drastic reduction in demand and pricing for traditional wood products,” said Molly Pitts, executive director of the Colorado Timber Industry Association. “It is super helpful that the Colorado State Forest Service and the Upper Arkansas Area Council of Governments have a loan program in place that these businesses can utilize, especially during this difficult time.”
Alternative Source of Funds
The Forest Business Loan Fund supports companies that may not qualify for loans with traditional lenders, so it does not compete with commercial lending institutions, Reader said. The loan program can, however, leverage additional lending capital for businesses, since forestry experts with the CSFS review and approve all loan applications.
“Through the fund, we help bridge the gap between the wood products industry and lenders to increase capacity for forest management in Colorado,” Reader said. “The Upper Arkansas Area Council of Governments brings their lending and business expertise, while we bring our wood products harvesting, manufacturing and market expertise, for a collaborative-based lending approach.” The fund helps the CSFS meet its mission of forest stewardship in Colorado by supporting the forest products industry. Businesses that receive a loan must use beetle-killed and other timber from forest health projects, such as those that reduce wildfire risk. Reader said that this, in turn, results in healthier forests, communities and local economies, which is especially important during this challenging time.
“It’s a win-win,” Reader said. “We’re building capacity to implement forest health projects while helping to maintain or create jobs that bolster small businesses and our local communities.”
For more information on the Forest Business Loan Fund, including qualifications and an application, please contact Reader at (970) 247-5250, or visit csfs.colostate.edu/cowood/forest-business-loan-fund/.