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to provide funds to local business seeking to expand, or to help small start up businesses <br /> get going. <br /> The philosophy behind this type of program is the notion that the City can <br /> appropriate a portion of its funds for use in loans, which will then be repaid with interest <br /> over time. These loans provide relief to businesses and allow them to meet financing <br /> needs without having to provide the large amounts of personal capital most private <br /> sources require before providing financing. These loans are only to be used as an enabler <br /> and in situations where the but for test is met. <br /> Revolving loan programs are attractive to cities because they are relatively <br /> simple, usually only require a one-time investment, which can be recouped and used <br /> again. The fact that these loans are relatively small in amount, and the fact that they are <br /> loans, means they will inherently be less complicated that a tax increment financing deal <br /> or a tax abatement deal. Additionally, cities typically only need to make one budget <br /> appropriation to get a program of this type started. This appropriation will eventually be <br /> repaid by the business, plus interest, and will be able to be used again. <br /> Because of these factors revolving loan funds are attractive programs to cities and <br /> EDAs and are a good first step program for these agencies to utilize as they enter the <br /> economic development game. In the case of Hugo, it is my opinion that a budget <br /> appropriation to start a revolving loan program would be a very prudent investment, <br /> which would provide the newly formed EDA with a strong foundation as it moves <br /> forward. Ultimately the most appealing aspect of these programs is their revolving <br /> nature, i.e. the fact that they will be repaid and used to fund other future projects. The <br /> City has the option to leave money sitting in reserve, for a rainy day, or it can use a small <br />