Batavia microloans aim to help businesses

Batavia is hoping to give businesses a little help with its new microloan program.

Low-interest loans of up to $25,000 are being made available to Batavia businesses through the program, recently approved by the city council. The council agreed to make up to $100,000 in microloans.

“We are excited to be able to provide a loan program that is tangible to our businesses, Mayor Jeff Schielke said in a prepared statement. “We hope this program can help those businesses that just need a little extra to keep going and help them get over the hump.

It is a subsidiary of the city's longtime Revolving Loan Fund program. The RLF is funded by the state Department of Commerce and Economic Opportunity. Since Batavia established the RLF in 1986, it has made about a half-dozen loans, at an interest rate of half of the prime lending rate.

The microloan program was suggested to the city by the Batavia Chamber of Commerce at the request of one of its members. Assistant city administrator Randy Recklaus, in a report to the city council, noted it seemed to dovetail with what the city has experienced the last year: No loans were made from the revolving loan fund because “businesses have been looking for a much larger amount of funding or much less, he said.

The revolving loan fund has $288,000 in it. The limit on the normal RLF loan is 25 percent of a project's cost, up to $200,000. The RLF loans can only be used for fixed assets, unlike the new microloans.

A business loan review committee is being established. Final approval on the microloans will come from the city council.

For each $10,000 requested, a job must be created or retained. And the loan can only account for 50 percent of the cost of the project; the rest must come from the applicant or another source.

The money can be used for acquisition, construction, rehabilitation, machinery and equipment, or installation of commercial and industrial facilities and working capital expenses. Working capital expenses are limited to inventory, employee salaries and general operational expenses.

The city is looking for four people from Batavia businesses to serve on the review committee. The mayor, city attorney, city administrator and the city finance director will also be on the committee. People interested in serving should send a letter of interest, outlining their qualifications, to Meredith Hannah at mhannah@cityofbatavia.net. For additional details, call the city's Economic Development Department at (630) 454-2061.