Arlington Heights discussing zero interest loans for small businesses
Arlington Heights is moving forward with plans for a zero interest loan program to attract and retain small businesses in the village.
The program has been discussed by the Arlington Economic Alliance for the past year, and although the committee of the whole of the village board approved the concept, several members said they wanted more details before it is actually implemented.
The program would be funded by creating a $1,000 nonrefundable application fee for class 6b and class 6b renewal tax abatement programs along a 10 percent remittance of the projected annual savings for the first five years of an approved tax abatement program, according to staff documents.
The program would aim to attract and retain nonsales-tax generating businesses such as manufacturers in Arlington Heights, according to the alliance's recommendations. The money could be used toward costs of relocation, expansion, interior build out, machinery and equipment.
According to the recommendations, the loan would fund up to 50 percent of the total project cost, but no more than $10,000 at 0 percent interest for a term of five years, and no longer than the remaining lease term.
Some of the details of the program could still change, as a final draft will need to be brought to the board before it is put in place. Trustees Mike Sidor and Bert Rosenberg voted against the motion at this point because although they like the idea, both said they had too many questions about how it would work.
Trustees brought up issues with the program including that there was no definition of "small business" and that there may be a need for a cap on savings from some larger businesses who may apply for tax abatement programs.
Trustee John Scaletta said he was most concerned with the village getting the loan back. He was worried the situation could get messy in tenant-landlord situations and wanted to have a guarantee that the village wouldn't lose out on money.
"We need to be more like a bank and get all our ducks in to a row to make sure we get repaid," he said.
Trustee Joe Farwell said he doesn't think $10,000 is enough of an incentive to draw businesses because on some projects that would only cover a fraction of their expenses.
"If you are really looking to bait businesses then you need a bigger hook than what you're talking about here," Farwell said.
He and Trustee Jim Tinaglia also said they wanted the program to be available to existing businesses as an incentive for staying in Arlington Heights.
Even if the program were put in place soon, there wouldn't be any funding for at least a year and a half because there are not any pending class 6b applications, said Charles Witherington-Perkins, village director for planning and community development.
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