Office of the CEO

Entrex Inc.

48th Floor

311 South Wacker

Chicago, IL 60606

 

November 16, 2009

 

The Honorable Congressman Mark Schauer
United States House of Representatives
1408 Longworth House Office Building Washington, DC  20515

Subject:   “Fed/State Loan Guarantees”

Dear Congressman Schauer,

Further to our discussion together with your staff, the issue of immediate deployment of growth capital into private companies to induce employment growth is indeed urgent.  

As you know, unemployment is rising close to unprecedented levels.  Private companies can make a substantial difference in reversing the rising levels of unemployment, but they need growth capital to begin hiring and to grow their businesses.

As I mentioned in our most recent discussion, we are working with several institutional investors who are immediately ready to deploy capital into private companies (as defined by the Small Business Administration) including those companies that are located in your Representative District and across the State of Michigan.  

We have commitments from investors for up to $250,000,000 in equity capital.  If there were a way to harness State level support, in the form of “general loan guarantees”,  these investors have indicated they could start deploying capital into private companies before this year’s end..

In our conversations about this topic at the State gubernatorial level, several government officials have alluded to potential State and/or Federal Government backing that may be available to help distribute risk of these investments in private companies, at least for a period during these difficult economic times.  They point to areas within the American Recovery and Reinvestment Act of 2009 (“ARRA”) where there are numerous provisions for support of loan guarantees but there are few areas that offer “general loan guarantees”.   They say however, that there are provisions where States are allocated ARRA funds to programs that “the Governor shall deem appropriate”.  It appears to me that this avenue could represent a way to start the ball rolling.

I’m asking that your office and ours to collaborate and organize a program where private investor capital and State level ARRA loan guarantee funds can be deployed into selected private companies in your State and District for the specific purpose of workforce expansion.

I await your follow up and am available at your discretion.

                                                                Sincerely,

Stephen H. Watkins

Entrex Inc.

CEO