TITLE: Title
Establishment of a new Business Loan Fund
PURPOSE: The purpose of this item is to have the Board consider establishing a new Business Loan Fund with funds that were set aside in the current FY 2012-13 Budget.
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DEPARTMENT: Economic and Community Development
CONTACT INFORMATION: Annette D. Stone, ECD Director, 918-7319
INFORMATION: The adopted FY 2012-13 Budget includes funds to establish a new business loan fund distinct from the existing Revolving Loan Fund. The proposed criteria for the new Business Loan Fund (BLF) differ by the type of eligible expenditures and the requirement for job creation. First, the proposed BLF may be used as supplemental to the existing where a project does not meet the requirement for job creation, but the Board of Aldermen believes a new business would be a viable project. Lifting the job creation requirement for the new business loan program allows for more flexibility in loaning money to new businesses. Secondly, the money could be used for aesthetic projects, such as fa?ade improvements, new signage, or awnings. And third, the money could be used for emergency capital funding to a business. The program would allow up to $20,000 in unsecured loans. Applicants would still be screened for credit ratings and would be required to sign a personal guarantee. In addition, it should be noted loans are made solely at the discretion of the Board of Aldermen.
The Economic Sustainability Commission's recommendation for the Town's new and existing loan fund is it should be a resource, not the sole source of funding, to new and expanding businesses. When an entrepreneur does not have all the capital needed to fully fund a project, the Town should consider bridging that gap with the Town loan funds. This approach of requiring new businesses to seek multiple sources of funding spreads the financial risk of starting a new business. Previously, the Town considered the Revolving Loan Fund a last resource f...
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