Just What IS the Resulting Investment in Jobs?
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The Water Dividend Trust (WDT) will be investing
a substantial portion of the total monies collected each year to establish a revolving loan fund to help Maine small business and farm enterprises. This loan fund will be used for financing entrepreneurs and small farmers.
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Fifty percent of all entrepreneurs begin their businesses between the ages of 24 and 44. Therefore, the trust will make a special effort to reach Maine.s young people. The key to having Maine's Young Citizens stay in Maine is to create economic opportunity. “Our nation's gross domestic product for 2002 was $10.2 trillion ...the small sector was just over $5.3 trillion,” states Donald Wilson president of the Association of Small Business Development Centers. 1Entrepreneurship is central to an increased economic activity and a more prosperous Maine Community.
“Entrepreneurs create between 60 to 80% of the new jobs nationwide and generate more than 50% of the nation's gross domestic product. [Without entrepreneurs], President Bush stated last year, ‘the American dream would go unrealized.’”2
We anticipate that the fund will be leveraged by reselling the portfolio on Wall Street. We will be holding ten percent of the fund as a reserve for bad debts and for the fund management costs. We also plan to leave an amount in excess of $25,000,000 as fund reserve which will grow as it will be tied to an escalator factor.
For the first two years, the fund will be allowed to grow with its interest earnings. No loans will be made in that timeframe. Once the reserves have been established to fiduciary standards, loans will be processed against the balance available.
| Anticipated Loan Amount | Number of Jobs Created | |
|---|---|---|
| Year 3 | $50,000,000 | 3,400 |
| Year 4 | $90,000,000 | 6,100 |
| Year 5 | $140,000,000 | 9,500 |
The above table reflecting the number of jobs created is based upon the US Small Business Administration (SBA) figures. The SBA stated that for loans under $50,000, a new job is created for each $14,700 loaned.
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