McHenry Co. considering 'micro' loans small businesses

The federal government has spent billions of dollars bailing out banks, Wall Street firms and big-time corporations like General Motors, but little has been said of the thousands of small businesses struggling alongside them through the ongoing recession.

McHenry County leaders hope to change that, at least on the local level, with the creation of a "micro" loan program that will let small business owners and entrepreneurs borrow as little as $1,000, and no more than $25,000, to help grow, or just get by, through the economic downturn.

"There really are a vast array of needs that are going unmet, and it is particularly exacerbated because banks are being extremely careful about how they loan," said Marc Munaretto, chairman of the McHenry County Board's Finance and Audit Committee. "Having the access to capital is sometimes the difference between being in business and being out of business."

Munaretto's committee on Tuesday discussed, and informally endorsed, the creation of the program. He hopes to have the details worked out, and ready for a formal vote, in two weeks.

The plan calls for the county to set aside about $200,000 from its revolving loan fund - which typically gives loans of $50,000 and up - for access to small businesses and entrepreneurs looking for short-term help to start a new company or expand an existing one. The loans may also be made available to help struggling companies meet their operational costs, officials said.

Pamela Cumpata, president of the McHenry County Economic Development Corp., said there is a substantial need for the kind of financing the micro loan program would offer.

"Anytime small businesses can get access to capital, it's fabulous," she said. "Given where the banking industry is now, this is going to be a catalyst to get (small business) growing."