Illinois village looks to boost small business formation

The Illinois village of Arlington Heights is hoping to create the "Small Business Zero Interest Revolving Loan Program" with funds from the Class 6B Tax Abatement. The loan program would give a boost to small business formation in that area of Cook County. So far, the businesses who would ultimately be contributing to the fund are in agreement with the plan.

The Class 6B Tax Abatement allows industrial companies who purchase and occupy real estate in Cook County a 10 percent tax assessment for 10 years, a 15 percent tax assessment in year 11, and 20 percent in year 12. In order to receive this tax status, companies have to be approved by the village where the real estate is located. Arlington Heights wants to charge companies a non-refundable application fee of $1,000.

The fees would be used to fund the loan program in addition to 10 percent of the company's tax savings during the first five years the company has Class 6B status. Companies will be able to apply for a loan of up to $10,000, but not more than 50 percent, of the total cost of a project. The loan would then be interest free for up to five years.

If the program is approved, Arlington Heights is hoping that more small business formation will take place in its village. Anytime a small business can take advantage of such a loan program, it may be worth looking into. There are enough financial obstacles to starting or expanding a business, and having access to some extra, interest free money could make the difference.

Source: Chicago Tribune, "Arlington Heights propose zero-interest loan program for small businesses," Sally Ho, July 1, 2013

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