For almost three decades the town of Bristol has benefited from the use of a Revolving Loan Fund, which has allowed many Bristol property owners and businesses to obtain capital for projects that have been beneficial to those entities and the Bristol community.
The total balance of the fund is approximately $722,824. Currently $528,842 is committed. Which leaves an available balance, as of November 30, 2018 of $193,982 to lend. Who is eligible to borrow from the fund, to what purposes, and how does the application process work?
The Bristol Select Board established three primary goals for lending from this program. They are: public safety purposes, lower income housing improvements or development, and economic development including infrastructure improvements. The Revolving Loan Fund has been used for all these classifications with the focus in recent years being in the economic development arena.
As far as who can apply, we have no list of requirements aside from the guideline that the applicant be someone who lives in or near the community or has strong ties to the project for which they are applying. It is a requirement that the project be located in Bristol. Loan amounts have varied from a few thousand dollars to as much as $100,000. There are no rules as to the maximum or minimum amount of any one loan. Our main constraint concerning loan amounts is the amount of cash on hand, a projects merit, and anticipated applications.
The Bristol Revolving Loan Fund was established with the intention of making dollars available to projects that may not qualify in part or at all with conventional lenders. With many of our loans we have partnered with banks, VEDA, and the Addison County Economic Development organization to provide the full funding for an eligible project. Occasionally we have assumed the entire risk on a loan. Our Lending rates tend to be slightly lower those of traditional lenders. The goal of the fund is to see the funds gross balance grow and keep pace with inflation, so it can provide meaningful dollars indefinitely. There is no profit motive. All loan receipts are paid back into the Revolving Loan Fund.
The loan application process is straight forward. One goes to the Town Clerks office where application paperwork is available. The thrust of the application surrounds the loan amount, it’s purpose and how it benefits the community, and a business plan that contains a balance sheet, and demonstrates cash flow so one can easily see how the loan can be repaid. All outstanding loans must be spelled out, as well as other proposed lending. The Revolving Loan Committee and Select Board wants any information that will give us confidence in the project’s viability. Once completed, the loan application is submitted to the Revolving Loan Fund Committee, which consists of seven community members. This committee, after a thorough review, makes a recommendation to the Select Board as to whether to accept the application, or not, and recommendeds loan terms. If approved by the Board, the loan package is sent to the town’s attorney, so the proper documentation can be drawn up. Applicants can expect to pay a modest fee for the attorney’s work and for the time the Town Clerk and Treasurer spend on the application. Loan Committee members are not paid for their efforts.
Few Vermont communities can boast of having this resource for their town. The goal of this report is to give you more information on the Revolving Loan Funds existence and how it works. If you have any questions, please contact Fred Baser chair of the Revolving Loan Committee or inquire at the town offices.