Whitestown businesses will soon be able to borrow money from the town government to purchase land, make improvements to their buildings, or buy machinery and furnishings.
The Whitestown Town Council has appropriated $50,000 for the new revolving fund program, which will provide loans of up to $10,000 to town businesses in an attempt to improve infrastructure and foster economic development.
According to town documents, the goals of the revolving loan system are to spur economic growth, promote employment opportunities in the town, attract new businesses, upgrade the appearances of existing structures and retain and expand existing Whitestown businesses.
The council approved the program at its May 10 meeting but waited until the Nov. 8 meeting to move money from the general fund to pay for the program.
At the May meeting, Whitestown Town Manager Dax Norton said he is often asked why local officials don’t do more to improve the Legacy Core. The buildings are privately owned, which gives the government little ability to interfere.
“This is one way we can work in a public/private partnership to help the owners of those private businesses do just that,” Norton said. “We are doing a tremendous amount of things in the Legacy Core to help revitalize it from its 50 years of slow economic decline. It is returning, and that’s exciting.”
According to town documents, the loans will be granted only for specific purposes, including:
The Redevelopment Commission, which has yet to approve the ordinance establishing the program and its related guidelines, will administer it.
Applicants must meet several criteria to obtain a loan. The RDC will take into account location, economic impact, the scope of the project, the applicant’s standing with local law enforcement, and the coordination between the project and other town and private projects.
Businesses must submit a completed application, a $500 fee, a personal credit history and business track records, in addition to a project plan that must include a financial analysis and timeline for completion.
The RDC will review applications and then vote on them at its regularly scheduled meetings. Applicants will be asked to attend and present their case.
While the initial $50,000 to fund the program was transferred from the town general fund, in the future funding for the revolving loans will come from loan repayments, economic development money, bonds, grants and proceeds from the sale of notes sold to evidence loans, according to town documents.
Once approved, the loans will be dispersed as reimbursements, meaning the businesses will pay all costs up front and then seek reimbursement from the program by submitting invoices and receipts to the RDC.
The RDC will have the discretion to decide whether an applicant will receive loans, forgivable loans or a combination of the two. The five-year loans will come with a fixed annual interest rate of 5 percent.
Whitestown has been trying for two years to create a loan program that would help fund improvements to the building facades in the Legacy Core, Norton said, but the town had trouble finding ways to pay for it.
The Boone County Economic Development Corporation already operates two microloan programs.
In Zionsville, the EDC partners with the Zionsville Redevelopment Commission, the Town of Zionsville and the State Bank of Lizon on the Zionsville Micro Loan Program. Businesses located within the Zionsville Tax Increment Finance allocation area are eligible.
The other microloan program covers Lebanon, Thorntown, Jamestown and parts of Whitestown, and is operated in conjunction with the U.S. Department of Agriculture and Home National Bank.
The programs provide low-interest loans of up to $25,000 for land and building acquisition, interior improvements including computers and furnishings, and roof and signage improvements.
The RDC will vote on the program, as well as the application format and guidelines, at its December meeting, which has not yet been scheduled. The Dec. 4 meeting was cancelled due to a lack of a quorum.