KENNEBUNK — The Select Board in Kennebunk is eyeing a program that would offer low interest loans to businesses, but wants to discuss the matter more before taking a vote at its June 23 meeting.
The program would be separate from a business loan initiative recently announced by the Kennebunk Development Corporation, a local nonprofit that will offer $5,000 loans to small businesses in the community.
The Select Board is considering funding the program with the use of $50,000 in TIF money set aside for two specific projects that are unlikely to be tackled by June 30, the end of the fiscal year – including sealing sidewalk bricks and a traffic signal project.
If the proposal is approved as presented, loans of up to $5,000 each could be offered to small businesses.
The Kennebunk Micro-Loan Program would be administered by the Southern Maine Finance Authority, June Huston chair of the town’s Economic Development Committee, told the Select Board on Tuesday, June 9.
Participating businesses would have fewer than 50 employees.
The program is designed to support small businesses with ongoing and extraordinary expenses incurred during the COVID-19 interruption in business.
Loan proceeds could be used for overhead expenses like rent, utilities, insurance and taxes, payroll, adaptive improvements, marketing and signage. Loans would be for a term of 48 months, with a monthly payment beginning six months after closing. Huston said the monthly repayment would work out to less than $100 a month. Information about who was applying and for how much would be confidential and known only to the Southern Maine Finance Authority.
Will Armitage of the Southern Maine Finance Authority said the agency is managing eight such loan programs at present. He said the loan applications would be reviewed using historical cash flow credit reports and other documentation..
“A loan in a down cycle like this is a challenging process,” he said.
As the Select Board began to discuss the program, Chair Blake Baldwin said a conflict of interest issue had been raised — that he, and members Chris Cluff and Wayne Berry could potentially apply for one of the loans. All three said they have no intent to apply, and the four remaining Select Board members agreed they could take part in the discussion.
Some wondered if the program was needed.
“Before we jump on board, let’s see if there’s a huge rush to (the Kennebunk Development Corporation) program,” said Cluff. “I’m not sure there’s a true need.”
“Businesses are sinking,” said Select Board member Shiloh Schulte, He said he’s generally in favor, but has some questions. He pointed out the TIF fund can help businesses, just as general assistance can help residents.
Huston said Saco has already had already dispensed $120,000 in their program and said she believed there was another $120,000 pending in that community.
Select Board member Ed Karytko said he was a bit uncomfortable using taxpayer money for loans.
“This is a gesture to give back tax dollars businesses themselves have generated,” said Budget Committee member Dick Morin.
Budget Committee member John Costin said the town is facing a debt crisis and will have problems with budgeting in the next few years.
“As much as it is well-intentioned and compassionate, I don’t think it’s appropriate,” Costin said.
Baldwin said the “banker in him” would say no, but said he also wants to help find a way to help businesses in Kennebunk that are struggling.
The Select Board agreed to host a workshop, and will vote on the measure June 23.
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