Agenda - 09-16-2014-13 (4) - Laserfiche WebLink

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INFORMATION ITEM NORTH CAROLINA Economic Development MEMORANDUM To: Orange County Board of Commissioners From: Steve Brantley, Director Date: September 9, 2014 RE: Follow Up to BOCC Information Item on Small Business Loan program's Activity On 4/15/14, Orange County Economic Development presented a Report to the BOCC regarding Orange County's "Small Business Loan Program ". This Report (see Abstract as attachment #2) outlined the history of the loan program, described the typical fees & interest rates, typical loan amount and term, summarized the current borrowers and loan balances, and identified the board of directors and loan committee members. A copy of the Program's Bylaws, and Policies & Procedures was also included. BOCC comments made during the April 15th Report presentation included a request for (a) clarification of the loan committee's approval process, (b) a desire to see the Program increase its lending activity to Orange County's small businesses, and (c) concern that certain credit considerations to approve loans (such as a current prohibition to lend to non - profits, or to applicants with pending criminal issues) were unwarranted and should be eased. The BOCC requested that Orange County Economic Development follow up with a subsequent report on these items. On 7/16/14, Orange County Economic Development convened the Small Business Loan Program's committee to discuss a current loan applicant's status, and also discussed the Commissioners' concerns from the 4/15/14 BOCC meeting, as outlined in attachment #3. The Program's board of directors reacted favorably to consider changing several current Policies & Procedures rules (such as the current prohibition against lending to non- profits, or concerning an applicant's pending criminal matters). The board of directors asked Orange County Economic Development to make proposed changes to the current Policies & Procedures document, and circulate the draft document back to the Program's loan approval committee for comments. The goal is for the loan committee to soon vote on the BOCC's proposed changes, and also to identify any credit analysis concerns where such changes are not recommended. For example, the 2 professional bankers (BB &T, Harrington Bank /Bank of NC) who serve on the Program's board of directors feel they have a duty to not burden an Orange County resident or small business owner with a level of collateralized, borrowed debt that is above the applicant's actual ability to repay. On 9/4/14, the BOCC received an "Information Item" memo from the Orange County Economic Development Office, and requested additional information on the loan program, to include a summary of the loan program's history by gender, race, age, applicant identity and reason for loan denial. in response, the Economic Development office has prepared a summary chart (see attachment #1, "Summary of Orange County Small Business Loan Fund ") of all loans approved since 2010, when the loan program first had available funds to lend to the first actual borrower. Although the Economic Development office has generated the summary chart (attachment #1), as requested by the BOCC, and believe the information to be accurate, please note that the loan program's current application does not ask for an applicant's gender, race or age, (nor past or pending