(Host) Vermont's leading economic development lender says business has dropped dramatically this year.

The Vermont Economic Development Authority is still lending money to growing companies, but only half as much as it expected.

The agency hopes to turn that around with economic stimulus loans that it will unveil in the next few weeks.

VPR's Ross Sneyd reports.

(Sneyd) Recessions aren't a time when most companies choose to expand. They usually can't.

But Magic Hat Brewing in South Burlington is an exception.

(Sounds of Brewery)

(Sneyd) That's the sound of beer being brewed. Magic Hat is in the midst of a growth spurt. It's running three shifts, five days a week.

With financing from the Vermont Economic Development Authority, Magic Hat has added on to its brewery in South Burlington.

General Manager Steve Hood says growth for specialty brewers such as Magic Hat has been phenomenal.

(Hood) ``So we're riding that wave and doing the best we can to continue to push it, take advantage of it. And we're building the brewery around us in order to meet that demand as the business continues to grow.''

(Sneyd) Magic Hat has already added on to the side of its building. A new automated bottling line sits in crates outside, ready to be installed in the next couple of months.

After that, a new "brewhouse" will be installed next to the bottling line. And the brewery's capacity will double to 300,000 barrels a year.

Along the way, another 60 jobs will be added. Within three years, the company expects to have 190 people at the brewery.

VEDA, the Vermont Economic Development Authority, has helped Magic Hat finance its expansion over the past dozen years.

VEDA chief executive Jo Bradley wishes other companies were having the same kind of success.

(Bradley) ``We're seeing companies really think long and hard before they commit to a project.''

(Sneyd) VEDA budgeted more than $10 million in direct loans this year.

But with less than two months to go until the fiscal year is over, only $3.5 million has been loaned.

Bradley said April was the exception. VEDA funded several big projects, including Magic Hat and a Springfield printing company's expansion.

(Bradley) ``We have seen things slow down quite a bit and we've been quite concerned that we haven't seen the activity that we had been seeing. I think this month was a little bit of an anomaly and I don't know that I can tell you why. But in general our volume is off.''

(Sneyd) Bradley hopes in the next few weeks to help drive a turnaround. The Legislature approved an economic stimulus package that includes one million dollars for VEDA.

The authority will use that money to leverage 18 million dollars in loans. They'll have interest rates well below prime, and Bradley hopes that triggers an economic comeback.

For VPR News, I'm Ross Sneyd.