Carrboro’s revolving loan fund has helped many small businesses take their first steps, but some failures have forced the town to re-evaluate how it works.
The fund was established in 1986 to help young businesses in Carrboro. It offers low-interest loans to businesses that promise to bring jobs to the town but have trouble securing enough private funding.
About $1 million has flowed in and out of the fund in its 25-year history, said Annette Stone, Carrboro’s economic and community development director.
But loan recipients Carrboro Creative Coworking and The Original Ornament closed this year.
Now, the Economic Sustainability Commission plans to re-evaluate the criteria for receiving a loan and the loan review process, Stone said.
The town will expand the way the loan can be used, moving it beyond small business start-ups.
At a Board of Aldermen meeting last week, officials motioned to extend the program to create emergency loans for businesses on East Main Street, which have been affected by a blocked sewer line.
Stone said the town could also add more conditions to loan terms, such as providing only part of a loan while requiring the business to obtain the rest from another source.
“It would be prudent to look at our loan underwriting methodology,” Carrboro Mayor Mark Chilton said.