FEDS HELP LOCAL COMPANY SHIFT GEARS.

Byline: David Greenberg Daily News Staff Writer

Lok-fast Inc., a manufacturer of small hand tools for the aerospace industry, and its distributing arm, Omega Technologies Inc., blossomed during the Reagan era of high defense spending.

Then came the 1990s.

Company owners consolidated operations by moving Newport Beach-based Lok-fast and Thousand Oaks-based Omega into a 25,800-square-foot building in Camarillo amid drastic cuts in military spending that have affected hundreds of manufacturing and high-tech businesses countywide.

The 56-employee company bought the building with a bank loan but needed additional funding to renovate the facility and maintain operations.

With a recent loan of $200,000 from the Economic Development Collaborative-Ventura County, Omega is one of several small, fast-growing firms that have taken advantage of a federally funded program offering loans to help ease the transition into more viable commercial markets.

``The EDC loan came in very handy to (supplement) what we had spent on the building,'' said Patti Escudero, the company's controller. ``It's helping us pay our bills quicker and continue operating - rather than having to pay somebody late. We are a growing business and we need working capital.''

A recently completed survey by the EDC showed that the average dependency of 185 area defense-linked companies fell from 51 percent to 42 percent from 1990 to 1997.

As a result, 42 percent of those businesses are marketing defense-related technologies and products for commercial business - with the numbers expected to increase sharply in the coming years.

``We need to get the other (58) percent and help them identify commercial markets,'' said Joe McClure, the EDC's loan officer. ``They may not know about the commercial markets. They might not think they need it. But the contracts coming out of the Department of Defense are not going to be around forever.''

The EDC was established in 1996 with a three-year, $3 million Department of Commerce grant. That money included $1 million for low-interest matching loans to small Ventura County companies that commit twice the amount from their own equity or bank loans.

``They lost about 5,000 jobs and several hundred businesses from 1990 through 1995 because of downsizing of federal money for military contracts,'' said Bob Cooper, EDC executive director. ``What we're doing with the surviving companies is asking, how can we stop the bleeding?''

Steered by a 24-member board of directors that includes business people, a City Council member from each city and two county supervisors, the EDC has loaned a total of $500,000 to four companies, including Omega, in the past two months. It has 10 applications pending for the remainder of the money.

``It's revolving,'' McClure said. ``As it comes in, I can relend it back out.''

He said more grant money from the Department of Commerce might be available if the EDC program is running efficiently and shows the need.

Dan Flaming, president of the Economic Roundtable, which conducted the survey in February and March, said the bulk of the businesses surveyed were always selling in the commercial market and now plan to shift their focus in that area.

In 1990, about 80 percent of Lok-fast's sales were linked to the defense industry, as opposed to 40 percent today, Escudero said.

Popular defense industry products and services from countywide firms include computer-oriented components, health-care plans, a wide range of consulting businesses, electronic components, sheet metal and machinery, and tools.