"This funding is available for businesses in our community that are in need," said Mayor Scott Johnson. "We presently have between $125,000 and $140,000 available for lending."
The City of Saratoga Springs Revolving Loan Fund has helped fund 15 projects since it was established in the mid 1990s through a federal community block grant. Since 2000, those projects have created 55 new jobs.
"It was established to assist small businesses and enterprises that would create new full-time jobs for persons, predominately, of low and moderate income," said Bradley Birge, administrator of the city's planning and economic development office.
Birge, whose department oversees the fund, said the city provides $25,000-$75,000 to help small business owners expand their operations, which, in turn, contributes to the health of the city's economy. For each $25,000 loaned, recipients are required to create the equivalent of one full-time job.
Currently, the city is working with seven local businesses that will pay back their loans within five to 10 years of receiving them. In total, they will return $250,000 plus interest. Interest rates depend on the project.
"Rates right now are just about 4 percent. That is a very attractive and competitive rate, especially on business loans," Mayor Johnson said. "I'm not quite sure why the word of mouth wouldn't be greater."
Revolving fund loans are typically given out to supplement a bank loan, and Johnson said the majority of applicants are referred by the city's lending partners, The Adirondack Trust Company and Saratoga National Bank, as well as Saratoga Economic Development Corporation.
"They help to identify individuals and businesses that may qualify," Johnson said.
Initially, the revolving fund was designed to support merchandise, warehouse, wholesale and manufacturing businesses, but "since the city's economy is really so dependent on retail and service, the city council voted to allow loans [of that type]," Birge said.
Colleen and Tim Holmes, owners of Wheatfields Restaurant located at 440 Broadway in Saratoga Springs, fit in that category. They received a loan in January 2006.
According to Colleen, the low-interest loan funded a large renovation project that doubled the square-footage of their business, and made it possible to open a second location in Clifton Park (54 Crossing Blvd. # 7) in 2009.
"When we purchased the business in 2004, we loved the roots of the concept and of course the location is fantastic, but we had a different vision for the space," Colleen Holmes said.
The Holmes purchased their neighboring storefront, previously Silverado before the jewelry store also underwent an expansion, and added a bar, a pizza kitchen and space for semi-private parties.
"We were able to add services and expand our menu, which we felt our customer base wanted," Holmes said.
The restaurant added happy hour at the bar, expanded its wine program, began hosting private parties for companies and individuals, and increased its capacity - all of which boosted revenue.
"Without the renovation of Wheatfields Saratoga we wouldn't have been able to move forward," Holmes said. "We had significant increases in sales and revenue and that enabled us to open a second location and create quite a few jobs - the entire staff in Clifton Park plus the additional [employees] brought on since 2006."
The city hopes more local businesses owners like Colleen and Tim Holmes will take advantage of the loan program. Johnson said the fund is underused and that more businesses should take advantage of it, especially in this economy.
"[Businesses] are still being challenged by the global economy and the effects of the recession; it's important that we create and support small businesses, and this program does precisely that at very competitive rates [for] the business owner and at no cost to the city," Johnson said.
The city council is responsible for approving loan applications. Johnson said credit-worthiness and the ability to pay back the loan are the criteria, aside from job creation.
"We want to make sure we get paid back; it's not a charity program, it's a loan program, a very solid loan program," he said. To learn more about the City of Saratoga Springs Revolving Loan Fund or to fill out an application, stop in to the planning office at city hall, located at 474 Broadway. Applications are accepted and approved on a rolling basis.
