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- Madison Development Corp.
has closed on loans to help two Madison technology companies, Extract Systems, LLC
, and Universal Separators, Inc.
, stretch scarce venture capital dollars.
The funds are part of a Venture Debt Fund established earlier this year by MDC, a local non-profit development company serving hard-to-finance small businesses.
A $200,000 loan to Extract Systems will help the company market its data extraction and redaction software. The company has developed proprietary technology and software that expands optical character recognition (OCR) technology with an enhanced capacity to identify information in unstructured legal, property, or medical documents.
Dave Rasmussen, president of Extract Systems, said the funding is important because software companies don't have a lot of hard assets. "Our assets are our people, and that makes it more difficult to find conventional funding sources," Rasmussen said. "There would be a big hole in our business plan if not for MDC."
MDC also provided $150,000 for Universal Separators to market its Smart Skim technology, which consists of systems and components for separating oil and other impurities from cooling and cleaning fluids used in the metal working and fabrication industries. While the systems are considered unique in recycling, the company needs to market the units to gain "first-mover" advantage.
Frank Staniszewski, president of of MDC, said the Venture Debt Fund has nearly $1 million still available for tech businesses in Dane County. The fund makes loans at rates from 2-1/2 to 10% over prime depending on risk.
Money for the loans comes from MGE Energy, the Cities of Madison and Fitchburg, and participating financial institutions. They include Johnson Bank, Associated Bank, Anchor Bank, State Bank of Cross Plains, Capitol Bank, Middleton Community Bank, and Oak Bank.Related stories
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