Dave Emerson, left, stands with Ken Wilson, the loan officer for the Belknap Economic Development Corporation. The BEDC, in partnership with two banks, provided Emerson Aviation with the capital it needed to weather the recession and renew its growth. (Michael Kitch/The Laconia Daily Sun)
BY MICHAEL KITCH, LACONIA DAILY SUN
LACONIA — "I grew up on the airport and I've been flying since I could walk," said Dave Emerson, whose father, Alan, founded Emerson Aviation in 1962, the year his son was born.
In 2005, several years after his father died while teaching a pilot when their plane plunged into Lake Winnipesaukee, Emerson acquired the company, the oldest "fixed based operator," or firm licensed to provide aeronautical services at an airport, in New Hampshire. A few years later, the economy slipped into what turned into the deepest recession since the Great Depression.
"We needed working capital," Emerson recalled, explaining the firm was saddled with debt at high interest rates, which it sought to refinance. "We were looking for $875,000," he said. A half dozen banks showed him the door before two offered to share a loan of $700,000. "I went to the Belknap Economic Development Council," Emerson said.
Ken Wilson, the council's loan officer, drew on the agency's revolving fund to arrange a $150,000 "gap loan" to complete the financial package Emerson required. Emerson said that with the advent of lower interest rates banks began approaching him and he was able to refinance his original borrowing. This week, he repaid the loan from the Belknap Economic Development Council. "The ink is not even dry," Wilson remarked.
Justin Slattery, executive director of the Belknap Economic Council, said "gap loans," which bridge the loan-to-value ratio expected by banks, are the mainstay of the council's portfolio.
"We don't compete with banks," he stressed. "We collaborate with banks."
Wilson, himself a veteran commercial loan officer, said that "our borrowers talk with the banks before they see me."
Noting that "every deal is different," he said that many loans, including that to Emerson Aviation, take the form of secondary mortgages secured by real estate.
Slattery emphasized that the revolving loan fund, which is continually replenished as loans are repaid, is separate from the council's operating budget, which funds salaries and other initiatives like fostering workforce development with schools and providing technical assistance to businesses.
Slattery said that with its revolving loan fund the council is able to assist local firms with the financing they require to retain and expand employment as well as make equipment purchases and undertake construction projects. Recently, the Belknap Economic Development Council partnered with Meredith Village Savings Bank to finance Hermit Woods Winery of Meredith and Bank of New Hampshire to finance to G.C. Engineering Inc. of Laconia.
Emerson said that when Mitt Romney, who owns a home on Lake Winnipesaukee, was a presidential candidate, the skies in the Lake Region teemed with aircraft, and, although traffic has thinned, his business is thriving. Emerson offers the only air taxi service in the Lakes Region along with flight instruction and the fueling. The air taxi service, which ferries executives between homes on the lakes and commercial centers across the Northeast, is the most profitable segment of the business. Meanwhile, Emerson said that as the economy recovers flight instruction has increased.
The firm operates a fleet of five airplanes, one twin-engine Piper Aztec doubling as a trainer and taxi. Emerson effectively operates 24 hours a day, seven days a week, except for Thanksgiving Day and Christmas Day, and employs 10 people, including three pilots. Emerson's father managed the airport, plowed the runway and tended the beacons and the company still clears the runway under a contract with the Laconia Airport Authority.
Emerson said his next project will be to construct a hangar with de-icing capability. He said that without de-icing capacity, Laconia is a three-season airport, especially for corporate jets.
"We get two or three calls a week about de-icing," he said, "as more and more are bringing their children to the private schools in the region — Brewster, Tilton and New Hampton." He indicated that the expansion would add another three to five jobs.
When the time comes, Emerson will approach the banks first, then, if necessary, the Belknap Economic Development Council.
Note: This story has been updated to correct Justin Slattery's name.
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