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JACKSON – “We’re very much interested in small businesses. We want to help you,” said Northampton County Commissioner Chair Charles Tyner as he welcomed the crowd here Tuesday night for a public hearing.

The topic under consideration was the county’s new proposed Small Business Loan Program.

“Let’s give people in our county an opportunity to do well, to do better. If you have a dream, let’s help you,” Tyner explained. “We want new businesses to come in Northampton County.”

According to the program overview distributed to citizens attending the hearing Tuesday, the program will function as a lending source to support new and small businesses in the county. The purpose is to fill a specific financing gap to help business owners who may not otherwise be able to receive loans from traditional sources.

Tyner also explained their ultimate goal is to be able to reduce county taxes by increasing revenue in the county through sales tax proceeds from new small businesses.

“We don’t want misunderstanding about what we’re trying to do in Northampton County. We’re trying to generate good dollars… to reduce our taxes,” the chairman emphasized.

County Attorney Scott McKellar presented the details of the program to the audience before the floor was opened for public comment. He noted Northampton’s program was modeled after similar programs that have been successfully implemented across the state, such as in Mecklenburg and Orange counties.

“This is a secured revolving loan fund program. What that means generally is if the Board should approve loans, they will be made from the pool of money, and the pool will replenish itself as funds are repaid back,” McKellar explained.

“The loans will be collateralized. The county will be protected in the event of default,” he continued.

Through the new program, the county hopes to achieve a number of objectives including reducing unemployment by increasing job opportunities, increasing the county’s tax base, redeveloping vacant land or blighted building areas, attracting other sources of capital, stimulating private sector capital formation, providing capital for manufacturing and service industries, and aiding minority- or female-owned business development.

Funding for the program is expected to come initially from a separate loan from a third-party bank in the amount of $500,000 but the county also has the option to choose other funding sources such as grants or county appropriations. Loans can only be made to applicants if there is a sufficient amount of money within the fund.

The initial third-party loan terms have not yet been finalized, but any funding for the program will be subject to another public hearing at a later date once it is.

Section three of the program explains who is eligible for funding and what those funds are allowed to be used for.

Some of those eligibility requirements for applicants include being a for-profit business entity, being located in Northampton County in areas zoned appropriately for use, having an annual gross revenue under $100,000, not having principal or business bankruptcy in the past five years, and not having open tax liens.

A few of the eligible uses of loan money include operational funds, purchase of equipment or machinery, improvement of owner-occupied commercial property, start-up funding, expansion of business services/products, acquisition of owner-occupied commercial real estate, work force expansion, infrastructure costs, and more.

The loan cannot be used for things like refinancing existing bank debt or investor loans, political activities, speculative ventures, lending or investment, floor plan financing, foreign-controlled businesses, and private membership clubs.

Loans can be made for an amount up to $100,000 and for a term up to 10 years. All loans will be secured by real or personal property collateral as deemed appropriate, and payments begin up to six months after the loan closes.

The program guidelines conclude by noting the county has the option to amend any portion of the guidelines with a public hearing if necessary.

After the program presentation, citizens had the opportunity to share their thoughts or ask questions about the proposal.

Henrico resident Patty Townsend expressed disapproval of the proposal, saying, “I have to ask why Northampton is considering going into the banking/lending business to the tune of borrowing and then lending $500,000 of my hard-earned taxpayer money. Let the lending professionals handle lending the money, and the Northampton County Commissioners Board handle getting your organization house back in order.”

Townsend said her concerns stemmed from lack of information available on the county’s website, such as previous board meeting minutes or an updated audited financial report. She also cited concerns about Northampton County Schools’ low performance grades and the county’s recent plans to purchase land on Lake Gaston as other reasons why the county should not focus on loaning money.

Jack Saunders’ brief public comments were questions about previous loans made to businesses by the county and if they had been paid back.

The News Herald confirmed that two businesses had previously received funds from the county’s Revolving Loan Program in the last five years. The original owner of Baysire Bistro in Jackson received a loan to open the restaurant, and that loan has been repaid in full.

The second recipient of a Revolving Loan were the owners of the Food Fresh grocery store in Jackson which opened in March this year. The Board approved their loan of $225,000 in Dec. 2018. Payments originally had been deferred for six months but are currently being paid back to the county on time.

The new proposed Small Business Loan Program is similar to the old Revolving Loan Program in that they share the goal of supporting businesses that would otherwise not be able to receive loans from traditional lending sources.

Differences, however, stem mostly from funding sources and restricted use of those funds. The Revolving Loan Program was originally funded through Community Development Block Grants (CDBG), and all activities funded through the loans had to meet eligibility requirements consistent with U.S. Department of Housing and Urban Development regulations. For example, loans through the Revolving Loan Program were required to create or retain at least three new permanent full-time jobs and at least half of those jobs must be provided to low- and moderate-income persons.

There are no such restrictions in the new Small Business Loan Program.

The Revolving Loan Program is still active and available for applications.

After the public hearing was closed, the Board made no further comments on the proposal. Commissioner Geneva Faulkner motioned to approve the program guidelines and application, and Commissioner Nicole Boone seconded. The vote was unanimously in favor.

Interested participants are encouraged to start submitting applications which should be sent to Franklin Williams at the Northampton County Economic Development Commission.