Sandra L. Bloem has seen first-hand the trials and tribulations of Michigan’s small businesses as they try to navigate through the state’s economic restructuring and the nationwide recession.

“We’ve had more losses in our portfolio in the last 18 months than we have in the entire history of the organization,” said Bloem, president and executive director of the Economic Development Foundation, founded in 1981 as part of the city of Grand Rapids.

“Unfortunately, as of late, there’s been more of our customers that have had to close their doors for one reason or another.”

The 501(c)(4) nonprofit foundation is one of six certified development companies in Michigan that lends money under the Small Business Administration’s 504 loan program. The loans — for land, building purchases, remodeling and equipment — are aimed at businesses with up to $8.5 million in net worth or up to $3 million in net revenues.

The 504 loans must be combined with bank loans and a 10 percent investment from the business owner, Bloem explained. Funded projects average a $1 million price tag.

“We basically walk a business through from beginning to end in terms of first applying for the loan, and then all the way through to funding,” said Bloem, who leads a seven-person staff.

“There are a lot of good SBA loan programs, but the only one we work with right now is 504. We’ve got special certification from the SBA to help with these kinds of loans. A business cannot get an SBA 504 loan without working with a company like ours.”

The Economic Development Foundation was first established as part of the city when the loans were introduced in 1981. At that time, the loans were limited to companies inside the city limits, Bloem said, and the program was staffed with one intern.

As the program grew, the SBA began to allow the organization to cover larger and larger geographic areas. Today, the EDF is allowed to serve companies throughout the state, although it does most of its business around Grand Rapids and Traverse City, Bloem said. Other CDCs are located in Holland, Lansing and three in the Detroit area.

“Interestingly enough, we’re all competitors, so to speak, which is kind of an interesting thing for nonprofits,” Bloem said.

“We all work throughout the state, but we all play nice in the sandbox, too. The real goal of the program is job creation and job retention, and so if a business can be helped with the loan program, that’s the important thing.”

The money for the SBA 504 program is obtained from the bond market. Once a month, 504 loans from across the country are bundled and sold as government-backed bonds to institutional investors.

“(Investors) are willing to take a lower interest rate because the risk is lower, and then that interest rate savings gets passed on to the small business. So, in essence, (small businesses) have access to bond financing without needing to be a very large company,” Bloem said.

Interest rates also vary monthly, she said. In late 2008, when bond markets were on ice, SBA 504 bonds still sold, but interest rates were more than 7 percent, she said. In February, for example, the rate was 5.55 percent.

Although the Economic Development Foundation is seeing an unusual number of companies falter, inquiries are up, as well, Bloem said.

“Especially in today’s market, financing has been a tough thing for a small business,” she said. Banks may ask for a company to put 25 or 30 percent down on a project.

“This (the 504 program) allows the small business to come in with only 10 percent. Typically, if they are buying a building or a large piece of equipment, they are growing and so they need that additional cash to help meet payroll, buy additional inventory, carry receivables — that kind of thing — as opposed to taking the cash and putting it in an asset. And so that’s one of the real benefits.

“The other is on our 40 percent piece of the project, the government can offer a fixed rate for 20 years on a piece of real estate and, in general, our rates are more attractive than what the bank financing is.”

Still, the program demands 50 percent bank financing. Having a government-backed loan can be a two-edged sword, Bloem said: It’s nice to have the U.S. back part of the deal, but it also means extra paperwork. EDF dedicates a staff person to handle that task. In this troubled economic environment, banks may delay issuing loans or companies may delay taking them for fear of what the next quarter will bring.

And loan officers, whose bonuses typically reflect the amount of loans in their portfolios, may be put off by a mere 50 percent stake in a deal.

The EDF, which approves about 40 loans in a typical year, has approved eight loans for $1.7 million since the start of the 2010 fiscal year Oct. 1, according to the National Association of Development Companies. About 90 percent of approved loans move into closing, Bloem said.

Bloem took the helm at EDF about seven years ago, after serving on its board of directors. The Calvin Christian High School graduate took the long road to a career in finance.

Bloem grew up in the town of Wyoming, one of three daughters of Bill Tacoma, a tool and die maker, and his wife, Rose, a homemaker.

“They instilled the value of hard work and Midwestern work ethic,” she said. “Not only that, my parents are pretty Dutch, and certainly frugality was part of our life, as well.”

Married at age 18, Bloem worked in the office for Hope Network and thought she had a knack for numbers. She attended Calvin College, then had her first child. After some time off, she returned to school at Grand Valley State University, one class at a time.

“I did the 12-year plan for going through school,” she said. “I ended up with a finance degree from Grand Valley.”

Even before she graduated in 1992 — which took an extra semester in order to fulfill requirements that had expired during her long tenure in college — Bloem had secured a job as a credit analyst at Michigan National Bank, which eventually was absorbed into Bank of America.

Thanks mostly to the frenzy of the many bank mergers and acquisitions since then, Bloem has worked for a half-dozen banks, mostly as a lender. She moved over to First Michigan Bank in Holland, only to see it become part of Huntington Bank. Her next job was at Old Kent Bank, now Fifth Third Bank.

Then a board member at EDF, Bloem had been working at Mercantile Bank for just a few months and wasn’t planning another change when the EDF position opened up in 2005. Urged to apply, she did, and joined the organization that fall.

“I had used this program as a lender myself, so I was familiar with how the process worked,” she noted.

This year, Bloem joined the boards of two other nonprofits, Georgetown Harmony Homes, a residential service for disabled adults in Hudsonville, and Grand Rapids Opportunities for Women, where she has taught financial statement classes for a decade.

Bloem lives in Grandville with her husband, Mike Roskamp, a GVSU professor of movement science, and three of the four children in their blended family. The eldest was married last summer, and the next in line is engaged.

Bloem and Roskamp are deeply involved in the music ministry at their church, Evergreen Ministries. Bloem, who studied piano for 20 years and taught piano during high school and while her children were small, plays keyboards. Roskamp plays drums. They play two Sundays a month at two services.

“We are very involved with the music ministry there, but we love it. We’ve been given a gift and a talent, and it’s our way of giving back,” Bloem said.

Bloem recalled that she was an hour late for her job interview at Old Kent, which was with a man who eventually became a good friend and mentor.

“It was because I had a customer in the job that was paying,” she said. “They had an emergency come up and they needed something.

“He was very understanding and said, ‘That was one of the things that really helped the decision to hire you was because you’re putting your customers first, before yourself.'”