HURRICANE -- Local lenders play a key role in developing small business in West Virginia, Gov. Joe Manchin told a regional bankers' luncheon Wednesday at Sleepy Hollow Golf Club.

The West Virginia Small Business Development Center hosted the event, which gave special attention to a reduced-interest loan option called "linked deposit."

Manchin praised the loans as a great resource for small business ownership.

"The backbone of our economy is small business," Manchin said, adding that with energy costs rising, people are looking for other ways to make a living, and for some, that means starting their own enterprise.

Linked deposit is a lending option for qualified small businesses and offers loans up to $250,000 for terms of up to seven years at interest rates no higher than the Wall Street prime plus one percent. Up to $20 million in linked deposit loan funds are available through the West Virginia State Treasurer's Office and can be pursued through approved banks throughout the state.

"I think it's going to be a tremendous shot in the arm," Manchin said of the loans.

To qualify for linked deposit, a small business must:

• Be headquartered in West Virginia.
• Employ 50 or fewer people.
• Have gross annual receipts of $5 million or less.
• Be organized for profit.
• Be in good standing with the West Virginia Department of Tax and Revenue and WORKFORCE West Virginia.
• Work with the West Virginia Development Office, Small Business Division to prepare the loan application and to monitor loan performance.

Loan proceeds must also create new jobs or preserve existing ones, can be used for startup costs, but may not be used for refinancing existing debt.

For more information, send an e-mail to wilsona@marshall.edu or lolder@wvsbdc.org or call 888-982-7232.