Arlington Heights doubles business loan incentive program

New or existing businesses in Arlington Heights can now apply for a no-interest loan from the village for up to $20,000, double the previous amount.

The changes to the village's zero interest loan program were approved by the village board Monday after a recommendation from the Arlington Economic Alliance.

Under the program, any new or existing business can apply for a loan to cover up to half of eligible project costs not to exceed $20,000 for a project that would enhance its operation in the community, such as relocation costs, interior build-out or purchase of equipment. Repayment of the loan is made in quarterly installments over five years. The program was first approved in April 2014.

Village Manager Randy Recklaus said that in the first 18 months of the program there were only three applicants and one approved project.

"We are careful who we give these loans to," Recklaus said. "We would like to see more interest because we do think it would be a benefit or our community and the businesses in town."

Recklaus said the board heard from several businesses that the original amount of the loan at $10,000 was not enough to be worth going through the application process, but that the added money might provide more incentive.

"This is a competitive business market. What is going to make a business open up and stay in Arlington Heights over the other suburbs nearby?" said Trustee Mike Sidor. "It's a battle. I'm highly in favor of upping the ante and I hope we get a few more bites on this."

The program is funded from money the village receives when a business gets a class 6b rebate from Cook County, Recklaus said.

He said the village expects to have $250,000 over the next five years in Class 6b receipts and that it has budgeted $40,000 in 2016 for the zero interest loan program.

Resident Keith Moens spoke during the meeting and suggested instead using the money for a coupon program to drive consumers to businesses already open in Arlington Heights.

"There is supply and then there is demand. We tend to ignore the demand side," Moens said.

"We do a lot of business subsidies and just hope that we can get a business open, but consumers don't magically come to help them stay open."

Several trustees said they thought Moens' idea was interesting and that they might consider it in the future.