The $9.8 million Sanford carved out for business recruiting efforts in fiscal 2004-05 is about $1.1 million shy of what the Commerce Department is working with this year. The department said the decrease will be offset by the savings it expects to realize from its restructuring last summer, which included 30 job cuts.

"We're going to be able do just as much next year as we have in the past year, if not more," Commerce Secretary Bob Faith said Friday.

In part, that may be accomplished through Sanford's proposal to create a new revolving loan pool for small businesses. The South Carolina Capital Access Program is designed "to encourage banks and other financial institutions to make small business loans that may be riskier or in smaller amounts than conventional loans," Sanford said in his executive budget.

Faith said the program would be geared at helping "companies that aren't quite bankable but are close."

The self-sustaining pool would be seeded with a one-time $2.5 million infusion from the sale of real estate by state-owned utility Santee Cooper. That money could be leveraged into as much as $56 million by attracting additional funds from a consortium of private lenders. Loans in the portfolio will be insured by reserve accounts financed by the participating banks and borrowers.

Other states have set up similar programs. Michigan, for instance, has parlayed a $5 million one-time investment into 2,000 business loans totaling more than $100 million, Sanford said.

South Carolina has not yet asked any lenders to participate in the program.

"We're in the early stages of looking at what other states have done to pull together the best ideas," Faith said.

Sanford also is pushing to expand Commerce's oversight starting July 1 by folding two smaller agencies, the Jobs-Economic Development Authority and the Office of Local Government, into the department.

One of the authority's main responsibilities is to help businesses with tax-exempt bond issues and government-backed loans. It has two employees.

The 11-worker Office of Local Government is part of the state Budget and Control Board and offers other public agencies financial and technical assistance with water, sewer and other infrastructure projects that often come into play in economic development.

"The ultimate goal is better coordination," said Sanford spokesman Will Folks. "If you've got state agencies whose fundamental goal is to bring business and jobs to South Carolina, it makes sense to put as many of those weapons as possible in the same arsenal."

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