A Bozeman businessman has launched a new program to provide zero-interest loans to entrepreneurs who do business in rural communities across Montana.

The Bootstrap Montana Loan Program, which will provide microloans ranging from $5,000 to $20,000, is the creation of RightNow Technologies CEO Greg Gianforte. It is based on the business development philosophy of "bootstrapping" - that is, helping a company expand with little or no investor capital.

"I just think bootstrapping a business is not only the most prevalent way to start a business (in the state), it is also the better way for Montana," Gianforte said Monday.

When business people raise professional money to expand a company, they often later sell that company or go public with it, he said. But most people starting businesses intend to run them for the rest of their lives and so don't seek out such funding, but loans can help them add employees or grow their companies.

The idea for Bootstrap Montana came from similar programs overseas, particularly in India, where microloans are used to help spur economic development in rural communities, Gianforte said.

Bozeman has been fortunate in that it has experienced rapid economic growth during the past few years, he said. The program could be a way for the community to help rural areas across the state.

There is $100,000 available for loans, a mix of a federal grant and Gianforte's own money. He sees the program as granting anywhere from five to 15 loans in its first year, which should be enough to determine whether it has been a success.

"This is a pilot year," he said. "We've been encouraged by what we've seen, but will it work in Montana?"

Gianforte believes it will, but he won't know for sure until he has seen it in action.

The loan program will be administered by TechRanch, a Bozeman-based institution that works with entrepreneurs to help launch businesses. Loans won't be available to companies in cities such as Bozeman or Missoula, but rather those in small communities such as Havre or Big Timber.

Preference will be given to companies that sell their products or services outside Montana, bringing revenue into the state, said Gary Bloomer, director of client development of TechRanch. Preference also will be given to those companies that will use the loan to make rapid returns on their investments.

Gianforte gave the example of a company that uses a microloan to set up a booth and sell its products at a trade show. That would be a rapid return on a relatively small investment.

Recipients of loans will be asked to turn in quarterly onepage reports to see if the money was used to create jobs or increase revenue, which will be used to determine whether the program is successful, Gianforte said.

Businesses can learn more about Bootstrap Montana and apply for loans online at www.bootstrapmontana.org; or call TechRanch at 556-0272 for more information.