HUDSON — City staff will contact business leaders to get a sense of how many companies are interested in applying for loans if a program is offered by the municipality through its Community Improvement Corporation.
City Council has, during its last few meetings, discussed the possibility of offering a Small Business Recovery Loan program to support merchants as they begin to reopen. A discussion took place at the council workshop on Tuesday night and is expected to continue at the next meeting May 19.
By law, the city must use the Community Improvement Corporation (CIC) to administer the loan program. City Solicitor Matt Vazzana said the CIC was founded in the early 1970s and was "designated as our agent of economic development within the city."
Council is considering the possibility of earmarking $300,000 for the program. The program would offer two types of loans and eligible businesses could apply for one of the two types. The Part A Reopening Loan would provide money for essential reopening costs, and the maximum loan would be $10,000 per business. The Part B Micro-Loan would provide shuttered small business assistance with reopening requirements, and the maximum loan would be $3,000 per business.
To be eligible for a loan from a CIC, the applicant must demonstrate they had tried and failed to receive a loan from a bank, according to Vazzana.
"I think that would really limit the loans that we’re probably going to make here," said Council member Beth Bigham (Ward 4) during council’s discussion Tuesday night.
City Manager Jane Howington said her staff is trying to clarify how recently a business had to apply for and be denied a loan from a bank in order to be eligible to apply for a loan from the CIC.
"We don’t know exactly what the timing is," said Howington. "Is it six months, is it a year? … What about the stimulus package? If somebody’s applied for the stimulus package and didn’t get that first wave, is that a denial?"
Bigham said she felt the issues discussed by Howington must be clarified before the CIC is called on to administer the loan program.
Given the potential conditions, Council member Hal DeSaussure (At Large) said he "wasn’t sure this is really going to do much for anybody."
Council member Skylar Sutton (Ward 3) said his colleagues should reflect on the amount of money and time involved in the endeavor, too.
"There’s a lot of moving parts here and a lot of people’s time," said Sutton. "If we’ve cut our potential applicant pool down to one business, is there value here?"
Jim Stifler, the city’s economic development director, said he believed some businesses would apply for the loan program that council is considering.
"It may serve to help some of the businesses in Hudson," said Stifler.
Stifler noted he did not think the city should attach a personal guarantee to the loans, but said if a business has to apply for and be turned down for a loan from a bank first it "puts a real damper on this kind of thing."
DeSaussure said he wanted the administration to clarify what actions would make a business eligible and ineligible for the loan program.
Council member Chris Foster (Ward 2) suggested that city officials approach business leaders, explain the situation and get a "hard count" on how many companies would be interested in applying for the loans.
Council President Bill Wooldredge (At Large) agreed with Foster on having the administration visit with the business community to determine the interest level, and he noted that more people needed to be appointed to the CIC so that it was a fully functioning body.
Wooldredge is involved with the Hudson Community Foundation, and he noted the organization is working toward offering a grant program to help businesses. He suggested the city could consider joining with the foundation on that program.
Reporter Phil Keren can be reached at 330-541-9421, email@example.com, or on Twitter at @keren_phil.