City may launch loan program in June

April 15, 1999

A city-funded loan program for businesses may begin in June, City Public Information Manager Karen Giffin said Wednesday.

Hagerstown's Revolving Loan Fund will be used to encourage retention and expansion of existing businesses to Hagerstown by offering additional loans, Giffin said.

For example, if a business gets a $40,000 loan from a bank but needs $60,000, the could help bridge the gap, Giffin said.

The loan fund is supported by $100,000 in the budget for the current fiscal year. The proposed budget for fiscal 2000, which begins July 1, includes an additional $150,000 for the loan fund.

Giffin said exactly when the fund will begin offering loans will depend on when and if the city is awarded a pair of $500,000 federal grants.

City Council members are expected to vote April 27 to give Giffin permission to apply for the grants.

According to a city memo, the Revolving Loan Fund will be administered by the City Community Development Department. Loans would be approved by the Hagerstown Redevelopment Authority, the city's loan board for community development loans. In some circumstances, the mayor and City Council will have final approval.

The loan program was reviewed during a City Council meeting Tuesday.

Councilman J. Wallace McClure said the city should be careful of possible problem loans.

Community Development Manager George Andreve said the loan board is careful, but noted this type of loan is inherently high-risk.

A business that was not a risk would have gotten all the money it needed from the bank, Andreve said.

- Dan Kulin

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