Disparity study on the table as Carrboro looks to revise business loan program

GOVERNMENT

By Michelle Cassell
Assignment Editor

CARRBORO — Carrboro is revamping its business loan program to support more companies and launching a disparity study.

The study will analyze the town’s business identity, acquisitions, and how it measures its goods and services. It will also identify the number of minority-owned businesses in the market.

“A disparity study is a study that looks at our purchasing practices and procedures, and then it also looks at how the town has been procuring our services,” Hartman-Brown explained. “So what types of businesses are they primarily related to? So are we mostly purchasing from white male-owned businesses, or do we have various businesses we’re purchasing from?”

Carrboro Economic Development Director Jon Hartman-Brown described several initiatives the town is pursuing and said a contract had been awarded to Atlanta disparity research firm Griffin and Strong. The company will begin work on the study in the coming weeks.

The study will measure how many Black, Indigenous and People of Color-owned and women-owned businesses are within a reasonable geographic range for Carrboro to procure its services. Then it looks to see if there is a disparity between who the town is purchasing from, the types of businesses they are purchasing from, and the percentage of BIPOC businesses in the market. 

Separate from purchasing goods and services, the town has a pair of loan programs to encourage economic development.

The business revolving loan provides for general business expenses and the energy-efficient loan helps local companies install upgrades like efficient windows, lighting and solar panels.

The revolving program, minted in 1998, has doled out $1.6 million split between 45 loans, and the younger energy efficiency program has granted fourn loans totalling $107,000 since the town started it in 2012.

The town has $239,000 on hand for the revolving program and $142,000 for efficiency upgrades. Neither of the loan programs are targeted toward minority companies, and the town wants to expand who they are available to.

“Our reason for revising the current business loan program is that our current policy is fairly stringent on who can apply for a loan and what you have to do to get one,” Hartman-Brown told TLR. “The bar is admittedly pretty high right now.”

Carrboro requires collateral for every loan, and you must own real property to qualify, he explained.

“There are a lot of entrepreneurs who don’t own property who can’t take advantage of our program. If you have a mortgage on your property, you will not be able to get this loan because the bank will have a first position on your loan.”

The town is looking into making the programs more accessible for minority businesses by “stair-stepping” the process without jeopardizing the fund.

“Stair-stepping means you could get a lower amount of money with little or no collateral,,” Hartman-Brown said. “And then as you need more and obtain some collateral, the more you could borrow.”

He is hoping the revision of the business loan program will become active in the fall, before the disparity study wraps.

“If the disparity study shows additional significant information, then we will ensure it is incorporated into our program with additional revisions,” he added, noting at this point, the town is not sure how many BIPOC businesses can take advantage of the loans at this point.

“We don’t know if we should be doing more because we don’t know the total supply,” he said.

Town environmental planner Laura Janway is the town’s lead in Solarize the Triangle, a group buying program for local municipalities.

People from all over the Triangle will go in together and commit to buying or installing solar panels using this program. Then, they can contract out large blocks in an RFP (request for proposal) to do 100 different businesses or 100 different homes.

Regarding the revised policy’s timing, Hartman-Brown said that they hope to get everything settled this summer, and Council will be ready to adopt it in the Fall when they return from their summer break.