The New York Times, April 24, 2005, Sunday

Copyright 2005 The New York Times Company
The New York Times

April 24, 2005 Sunday
Late Edition - Final

SECTION: Section 14LI; Column 1; Long Island Weekly Desk; Pg. 8

HEADLINE: Helping Small Businesses Get the Growth Capital They Need

BYLINE: By ROSAMARIA MANCINI

DATELINE: BETHPAGE

BODY:
THE growth of J.D'Addario & Company into a giant in musical-instrument accessories is a result of strategic planning and targeted marketing. But the loans arranged for the company by the Long Island Development Corporation cannot be underestimated.
''The L.I.D.C. helped to get us off the ground,'' said John D'Addario Jr., the executive vice president. ''They helped us with the financing we needed to build new facilities,'' he said, by assisting in getting three Small Business Administration loans.
J.D'Addario, based in Farmingdale, makes strings for musical instruments. In 1980, the year it received a $175,000 Small Business Administration loan, which helped pay for the construction of a 25,000-square-foot headquarters, the company had 110 employees and sales of about $5 million.
By its third S.B.A. loan in 1989 -- for $220,000, to build a 14,000-square-foot building for the automation and printing divisions -- the company had more than doubled its number of employees, to 225, and sales had tripled, to $15 million.
Today, the company has 950 employees, and sales last year totaled about $94 million.
J.D'Addario is among the companies, including Sleepy's, Uncle Wally's and Gold's Pure Food Products, that have grown because of loan programs assembled by the development corporation.
''They were with us, providing us with the right financial help when we needed it most,'' Mr. D'Addario said.
This year marks 25 years in business for the nonprofit private development corporation, which has closed 1,028 small-business loans worth more than $475 million. Loans worth another $100 million have been approved but have not yet closed.
''The mission has always been the same -- it's about small businesses investing in capital assets,'' said Roslyn Goldmacher, a founder, the president and the chief executive of the development corporation. ''If they do, they expand, create more jobs and invest in the Long Island economy. It's just a win-win situation.''
The corporation, based in Bethpage, has 22 employees and offers a variety of loans to businesses, including its most popular, the government-backed Small Business Administration 504 loan.
The S.B.A. 504 program works like this: The borrower puts down 10 percent, the development corporation picks up 40 percent and a bank covers the remaining 50 percent. The development corporation's money comes from government-backed bonds that have been pooled nationally by other providers in the S.B.A. 504 program and then sold to institutional investors. The loans are capped at different amounts depending on the type of business, ranging from $10,000 to $1 million.
''It's a program that doesn't require small businesses to sink a lot of their cash into the investment of capital assets and allows them to continue to operate smoothly,'' Ms. Goldmacher said.
The development corporation's loan programs have also helped to attract and retain businesses.
Last year, a $1 million S.B.A. loan helped the Lanco Corporation, a chocolate manufacturer, buy a 70,000-square-foot plant in Hauppauge and expand it by another 50,000 square feet.
''They made doing business in New York possible,'' said Brian Landow, Lanco's president. ''Our new building allows us to keep operations here.''
Steven Gold, an owner of Gold's Pure Food Products, which makes prepared horseradish and other condiments, said that in the early 1990's the company was considering whether to expand its plant in Brooklyn or relocate. The development corporation's financial plan lured the company to Hempstead.
''The Long Island Development Corporation made it really easy for us,'' Mr. Gold said. ''They did all the work and gave it to us on a platter, and we came.''
The development corporation's list of loan programs includes the Long Island Minority and Women Entrepreneurial Loan Fund, which offers loans up to $50,000 for businesses owned by women or members of minorities, and the Long Island Small Business Assistance Corporation, which offers loans up to $10,000 for businesses owned by women.
The development corporation has also helped Long Island businesses win more than $1 billion in government and private contracts under a procurement technical-assistance program, which it created with the Defense Department in 1986.
In 1994 the development corporation started working with Fireworks by Grucci, in Brookhaven, and helped it win a $1.3 million contract to make simulated missiles for Army training exercises. The company has continued to work with the military.
''This has been an excellent for us, and we are thankful to the L.I.D.C. for helping us to get started,'' said Phil Grucci, the executive vice president of Fireworks by Grucci. ''Without their help we would never be working with the government.''
Matthew Crosson, the president of the Long Island Association, the largest business organization in Nassau and Suffolk, described the development corporation as a ''bedrock institution on Long Island.''
''It's the place where small business can turn to for financial help and get it,'' Mr. Crosson said. ''Roz and her staff are spectacular.''
But Ms. Goldmacher never planned on a career in the financial world.
She received a bachelor's degree from Cornell University's School of Industrial and Labor Relations in 1975 and imagined a career as a union leader or organizer. She then studied labor law at Hofstra and began working closely with Irving Rome, a lawyer who was involved with the Long Island Economic Development Corporation. Steve Gurian, a former Unisys lawyer, was its president.
Ms. Goldmacher received her law degree in 1978 and started her own practice, and she slowly grew enamored of the financing aspects of economic development. She founded the Long Island Development Corporation in 1980 with Mr. Rome and Mr. Gurian, both of whom have since died.
She managed to balance practicing law and working at the development corporation for years, but in 1990 she decided to work for the L.I.D.C. full time.
''I never thought I would be doing this at all and never imagined giving up my career as a lawyer,'' she said, ''but now I can't see myself doing anything else.''