Carrboro Offers Loans To Businesses

The Revolving Loan Fund is available to encourage businesses to locate in the downtown area. The amount given in loans by the town comes from interest earned in previous loans and changes every year.

James Harris, Carrboro's community and economic development officer, said the loan gives businesses an opportunity to get loans at a lower interest rate than they could get at a bank.

"The idea of the loan fund is a creation of jobs," he said. "We look at businesses that want to locate downtown and bring a value to the community."

Harris said about 20 businesses have received the loan since the program's inception. The first revolving loan was given to the Weaver Street Market in 1986. The most recent businesses to get the loan are Crazie Mae's, Places Media Inc. and Orange County Social Club.

"The average given to each business is about $50,000," Harris said.

But, Harris added, the amount of the loan has ranged from $7,500 to as much as $85,000.

The length of each loan is related to the term of the lease of the business. The loan's interest rate also varies between businesses.

"The interest rate is based on their needs that they present in their paperwork," Harris said. "It is almost a formula; there are a lot of factors that play into that."

One of the factors that is looked at when determining the amount of the loan is the need of the business. To receive a loan from the town, the business has to show that it can't get a loan from a bank.

Harris added that the loan is not given to a specific type of business. Past recipients of the loan have been restaurants, printing companies, health centers and day-care centers.

"We have a theme downtown as the entertainment district, so when you come downtown there is always something to do," he said.

Chicken Noodle Soup received the loan from the town in 2001. It is a children's resale shop, selling baby furniture, clothes and goods at cheaper prices.

Elisabeth Allore, owner of Chicken Noodle Soup, said they used the money for startup costs.

"We used it for initial stock, fixtures and paid the first couple months of rent with it," she said.

Allore said that her business had money from traditional sources like the bank but that the town gave a better interest rate, making it easier to stay out of debt.

"We made it through our first year better with the loan than we would have with only money from the bank," she said.

The City Editor can be reached at citydesk@unc.edu.