The Challenge of Seasonal Jobs in Door County
COIN was created because a group of year-round and seasonal residents realized that the seasonal nature of our community leads to an inordinate number of seasonal jobs, and that creates hardships for those at the bottom rung of the economic ladder.
Consider, for example, the life of a front desk clerk at a hotel. For the person working in that job in Chicago, Milwaukee or Green Bay, it’s full-time year-round employment. As a result, the desk clerk probably has health insurance through his employer. In Door County, that same position is only a seasonal job – which normally means that no benefits are provided.
This isn’t meant to be a criticism of Door County’s seasonal employers, it’s just an economic fact of life when doing business in our community. The reality is that few seasonal employees have access to affordable group health insurance through their employer. So we count on charities like the Community Clinic of Door County and the Ministry Door County Medical Center Foundation to provide health care services and subsidies to those who cannot afford it.
Further, unlike the big city hotel desk clerk who can count on stable income throughout the year, in Door County that job probably doesn’t exist for much of the off-season. If they’re lucky, the desk clerk might be able to work additional hours in the summer months, but there just aren’t enough hours in the day to make up for the lack of employment after the season comes to an end. So we need groups like Lakeshore CAP and Feed and Clothe My People to fill the cupboard in winter when summer’s wages are gone. We count on WEP’s Energy Assistance Programs to help those who cannot afford to keep their home warm after the weather turns cold.
Certainly every community has its share of economic challenges, but the unique nature of Door County’s seasonal economy exacerbates the strains on our working families. That in turn increases the importance of our local charities as they address the issues that have been magnified by our reliance on seasonal jobs.
We need to make investments in human service programming, but the simple truth is that a stable, year-round job with decent pay and benefits is far more effective at changing lives than any human service program that we could create.
And that’s what COIN is designed to accomplish – to encourage entrepreneurs to build their businesses in Door County, Wisconsin.
Local Entrepreneurs Lack of Access to Capital
Prior to COIN becoming a formal concept, a series of meetings were held to determine whether a flexible loan pool was even needed in Door County. Several meetings were held with Door County’s small business community in an effort to learn more about their experiences trying to secure capital at their start-up and later as they tried to expand. Without exception, these local small business men and women shared their frustration with the difficulty meeting the strict underwriting standards required by the post-recession banking community.
Subsequent meetings were held with the commercial lending teams at both Baylake Bank and Associated Bank – by far the two largest lenders to Door County businesses. Rather than see COIN as a competitor, they view it as an early source for capital for a part of the small business lending market that is not well served by traditional banks.
The banks identified two primary concerns that keep them from servicing these small business borrowers – obstacles that COIN is specifically designed to overcome.
Tightened Lending Standards
First, commercial lending standards have tightened considerably since the dramatic upheaval in the financial sector and the subsequent recession. The once common concept of a local bank making a “character loan” to a smart and trustworthy entrepreneur has largely disappeared.
The commercial lenders shared their frustrations that they often encounter great business ideas from highly reputable people, but they are unable to get the business through underwriting because of these newly toughened lending standards.
Micro-Loans are a Low Lending Priority
The second challenge to our local entrepreneurs is that micro-loans – typically meaning loans of less than $50,000 – are a very low priority for most traditional lenders. There just isn’t a lot of profit in making such modest loans.
To add to the challenge, the commercial lenders have shared examples with us of great business ideas proposed by reputable folks – but they might need a little technical assistance.
For instance, an entrepreneur might be great at making widgets and needs $25,000 to get started, but the new business needs help creating a marketing plan. The banks simply do not have the time to “hold the hand” of this talented entrepreneur when the return on the loan to the bank is so small.
Micro-Lending and Mentoring
With the support of the our local commercial lenders, COIN has built a micro-loan pool and a mentoring program to help entrepreneurs thrive in Door County.