Lora Hayes never expected she would make a lot of profit when she was looking to take out a loan to buy a childcare service business in 1997.
“It’s still not anything where I’m ever going to be rich,” Hayes said of her business, Nova Learning Center, 9111 W. Bent Brook Lane, which she bought from a previous owner.
But Hayes says she loves her job.
Her purchase was made possible with public money from Athens County’s revolving loan fund, which is money mandated by the state to be spent on new or expanding businesses that are considered to be “risky” investments, meaning they might not be able to repay the loan.
Business Remixed, otherwise known as the Athens County Economic Development Council, has handled the fund since 2012. It can loan half of the business venture cost up to a limit of $500,000.
That makes “lenders who normally wouldn’t join,” such as a bank, more likely to risk loaning the rest of the money the business would need, Sara Marrs, the director of Business Remixed, said at a County Commissioners meeting in January.
Hayes paired money she borrowed from the fund and Hocking Valley Bank to buy the learning center. She paid back her revolving fund loan last year.
The hope is that a business will repay the loan, and then that money returns to the fund to lend out again — hence the name “revolving” loan fund.
Right now, there are three outstanding loans from the county’s fund, Marrs said.
Two are in good standing, but Marrs said the third loan was to the company that formerly owned Abrio’s Vera Cucina, which is in court receivership. Marrs did not say who was appointed to receive the former East State Street restaurant.
“We are not collecting anything at this point,” she said of the Abrio’s loan.
Business Remixed handles loan applications and does marketing for the fund, Marrs said in an email. Applications are reviewed by a third party and presented to the fund’s Finance Committee, which makes recommendations to the Athens County Commissioners who then vote up or down on granting a loan.
That gives Business Remixed the go-ahead to ask the state for final approval.
Hayes said she had a background in child care, providing child care services in her home for other children while taking care of her own, and said she took out the loan because she wanted to continue working with kids.
“When my third child was kindergarten age, I didn’t want to be tied to my house anymore, and I heard from a friend that Nova was for sale,” said Hayes. “I feel lucky I have gotten to know so many people in the community. Nova serves a lot of families — good families.”
Athens County businesses could also turn to a revolving loan fund from Buckeye Hills-Hocking Valley Regional Development District, funded by federal programs and serving seven other southeast Ohio counties.
Tina Meunier, Buckeye Hills business development coordinator, said revolving loan funds are “very effective economic development tools,” especially in Southeast Ohio, “because of the amount of jobs it can create in rural areas.”
Buckeye Hills has given out 128 loans totaling more than $7.6 million, said Gwynn Stewart, its communications director. Stewart added that there were 17 loans, worth nearly $1 million, granted to Athens County businesses.
Fast Facts
Eligibility: To get a loan, the business must be located within Athens County. It can also be a new or expanding business and can use new or traditional technology.
Use of funds: Funds can be put toward land, buildings and facilities, machinery, equipment, demolition, and site preparation, among other uses.
Maximum program participation:
The loan cannot be more than 50 percent of the project cost, up to $500,000.
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This article originally ran in print under the headline "Risky loans benefit county"
