Loan-Guarantee program helps native business thrive: the Bureau of Indian affairs back nativeowned businesses so they can get the loans they need to start or expand businesses.

• Author: Dotson, Pierre
• Position: Alaska Native Business News

Seldonio Native Association secured funding for Anchorage's new Dimond Center Hotel through Wells Fargo Bank and Alaska Industrial Development and Export Authority through a loan guarantee by the Bureau of Indian Affairs.

Billed as Anchorage's most sophisticated hotel, the future of the Dimond Center Hotel project was in doubt in late 2001, when financing options were drying up and hope was fading whether or not the project would get funded. At risk was more than $250,000 of development cost and a big dream with a potentially big payoff for the Alaska Natives of Seldovia.

"The project wa really stalled; getting financing was not as easy as we had thought it would be," said Michael Beal, CEO, Seldovia Native Association Inc. "We were certain we had a good package, but banks were cool to the idea; they did not have the same faith in the projects as we did. Only after we obtained a BIA (Bureau of Indian Affairs) loan guarantee did Wells Fargo Bank and AIDEA (Alaska Industrial Development and Export Authority) fund the project."

Hoping to leverage the central location of the Diamond Center Hotel into a springboard for its expanding eco-tourism packages, such as bear watching, glacier viewing, kayak tours among others, their big dream required a special hotel. It needed to be different from the look and feel of the major chains, free to express the unique character of the land and sea of Seldovia. Freedom from the major chains came at a price; banks were not enthusiastic about a Seldovia Native Association-managed stand-alone project. "Without the guarantee we could not have gotten any bank to fund an unproven Native corporation with a grand out of-the-box idea; we could not have come by the financing conventionally," says Beal.

To date, the partners in the Dimond Center Hotel are enjoying a successful project. The first major hotel located in South Anchorage, capitalizing on its proximity to major stores, banks and the Dimond Center Mall, it is attracting a large number of shoppers traveling to Anchorage from rural Alaska. "We have been proven right so far, we have an immediately profitable project, despite an overall sluggish summer tourism season," says Beal.

"A number of Native enterprises large and small have good projects. They know the markets. They pencil out and they have good management in place, but they lack a track record in that particular business. Every day we run across Native enterprises getting their feet wet in all kinds of...