Title
Resolution Adopting a Rewrite of the Business Revolving Loan Policy
PURPOSE: To adopt a rewrite of the Business Revolving Loan Program Policy.
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Department
DEPARTMENT: Economic Development
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Contact
CONTACT INFORMATION: Jon Hartman-Brown, Economic Development Director; 919-918-7319; JHartman-Brown@CarrboroNC.gov
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Council Direction
COUNCIL DIRECTION:
_X_ Race/Equity ____ Climate _X__ Comprehensive Plan ____Other
Council Direction Statement
This policy rewrite removes some collateral requirements and lowers barriers for certain businesses and entrepreneurs that do not have access to real or personal property. This revision is also a part of fulfilling Comprehensive Plan Economic Development Strategies 1.2 and 1.3.
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Information
INFORMATION:
The business revolving loan fund was created in 1986 for projects that result in the creation or retention of jobs. Loans from the fund were made to private non-profit and for-profit firms for projects such as construction or renovation of a building, purchasing existing buildings, the acquisition of equipment, and extension of utilities or streets to new sites, parking lots, and inventory. Other potential projects are explored with applicants if it can be shown that new employees will be hired or employees who would otherwise lose their jobs will be retained. The interest rate charged was based on cash flow projections and other means of documented need. Currently, the applicant secures all loans through an agreement conveying to the town a financial interest in the property the applicant owns.
At the current time the Revolving Loan Program is operated on very subjective terms set forth by the Economic Sustainability Commission and approved by the Town Council rather than by setting forth a written policy on terms. As we work to focus on equity, subjectivity introduces the opportunity for certain groups to be granted more favorable terms than others. This policy rewrite sets forth different...
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