Microloan lets Iron Range couple move back from Twin Cities

Catherine Branville always knew she wanted to own a store. But she wasn't sure what sort it would be. She'd moved with her husband, Gary, from Virginia on the Iron Range, where they both grew up, to the Twin Cities to get her business degree at the University of Minnesota.

Branville's decision was made for her when Irma's Finland House, a mainstay gift shop in Virginia, came up for sale a year and a half ago. She'd shopped there as a kid and had an attachment to the place.

"We love it on the Iron Range," 27-year-old Branville said. "Both of our families are from here and we knew eventually we wanted to come back this way. We needed the right opportunity and job. The store went up for sale and it all ironically fell into place. It gave us the opportunity to come back for a reason. We both have Scandinavian heritage, so the store was an interesting fit for us."

But putting together the $60,000 they needed to buy the store, plus extra for repairs, wasn't so easy. It can be tough to get a business loan from a bank these days. Some have tightened up lending standards. In other cases, individual assets, like homes, are worth less and so don't provide the same collateral they used to. (Branville and her husband live with her parents because they've been unable to sell their home near Lake Nokomis.)

Foundations and other organizations have stepped in to fill the gap with microloans. These loans, usually up to $50,000, can be easier to land than bank loans. And in some cases, getting the seal of approval from a foundation can lead a bank to loosen its purse strings.

That was the case with Irma's. Before making an offer on the store, Branville attended a small business financing seminar in Duluth, where she learned about the Northeast Entrepreneur Fund's microloan program. The nonprofit wound up lending her $25,000, which triggered the bank to provide most of the rest (the city and her parents chipped in also).

"It was huge," she said. "We knew the bank would never have lent us the full amount we needed. Without Northeast we could not have bought the business."

Branville and her husband have fixed the store's foundation and roof and painted its interior and exterior and replaced the carpeting and lighting. She's expanded the offerings a bit to include locally made glass jewelry and is thinking of turning the back of the building into a coffee and bake shop with cooking classes.

Irma's employs six people part time. "Things are going really well, knock on wood," said Branville. "We're beating all the projections we had for the first couple of years. There is a lot of work to do and a lot of projects on our list. Slowly but surely we're getting there."

"It's really nice to be back up here," she added. "We both ski and hunt and fish. This is where we want to be."

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