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Small business leans on government loans to keep afloat

Daniel Robison
Tiny bits of recycled rubber are molded into roofing panels at EcoStar. The Holland-based manufacturer was visited by SBA head Karen Mills, center, and Rep. Brian Higgins (D-NY), right.


Officials from the Small Business Administration (SBA) today toured a small western New York business that leaned on a federal loan during the recession to stay afloat.

It’s part of continued attempts by the Obama Administration to paint the stimulus package as a success.

EcoStar: where the rubber meets the roof

EcoStar makes roofing tiles from recycled rubber and diapers. The small manufacturer in Holland, N.Y., like many businesses its size, had trouble finding a loan when the economy was paralyzed in 2009.

The company eventually got a hand from the feds, in the form of a SBA loan provided by the stimulus package.

“In this economy, you’ll find that most private institutions are not lending,” says Ed Staroba, EcoStar general manager.

Securing public money to help his private enterprise has never been tough to find, says Staroba.

“Every time we’ve asked for help or been in a position where we’ve required help, we were able to reach out to local or state level or federal-level agency in order to either improve our level of employment or be able to maintain our level of employment,” Staroba says.

EcoStar eagerly touted the benefits of using taxpayer money to run its business during Thursday’s visit by SBA administrators, including the agency’s head, Karen Mills.

But Staroba was coy when asked to disclose specifics of that help.

“I choose not to. If [the SBA] wish to disclose that [then they can]. I’m a sole proprietorship. I’m not a publically-held company so I prefer to keep financial matters private,” Staroba says.

According to public records, Staroba’s company was lent $2 million by the SBA in 2009 to acquire EcoStar from Carlisle.  

After the merger was complete, during which some employees from Carlisle were not retained, Staroba says the U.S. economy saw a net gain of six employees. That works out to more than $330,000 in public money per job created.

The recession was so devastating, says Mills, that small businesses needed the government to step in with high levels of assistance after banks became shy about lending.

“The banking standards tightened, but they over-tightened. And we were able to step in and put $42 billion into the marketplace,” Mills says. “People forget how difficult it was in 2008 when the credit markets froze. Small businesses were really at risk. Now they’re beginning to recover. We must remember though to keep going, to keep the wind at their back.”

EcoStar now employs around 80 at its Holland facility, which used to be a Fischer Price toy plant.

WBFO/Western New York reporter for the Innovation Trail.
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