The Warren County Chamber of Business and Industry is asking the city and county governments to contribute toward the creation of a small business microgrant program.

The idea is worth pursuing. Many small businesses have difficulty accessing bank funding when they’re raising the capital needed, which is why many areas have some sort of small business assistance programs available. We have no doubt that many of those who reach out to the WCCBI are looking for funding, and we have no doubt that requests will likely be more than the $80,000 WCCBI is hoping to secure for the first year.

The real question isn’t whether a pool of money to help launch small businesses is needed, but what type of pool and how deep it needs to be in the first year.

In our opinion, we’re not sure microgrants are the best avenue for taxpayers who are being asked to foot 62.5% of the proposed microgrant program’s cost in the first year of what WCCBI officials are indicating is a multiyear program. The WCCBI is asking for $25,000 from Warren County and another $25,000 from the Warren Redevelopment Authority while kicking in $30,000 of WCCBI money. Let’s not forget this is in addition to the money the city and county are already sending to WCCBI for Warren Worx.

We’d prefer a small business revolving loan fund to microgrants. They take more work to administer, but as these loans are paid back the loan fund replenishes. That means there would come a point where taxpayers aren’t being asked for money every year to keep the program running. Running a revolving loan fund doesn’t have to be complex. And it needs to be part of the fund’s business plan that not all loans to small businesses are going to be paid back in full. It’s risky to open a business, so part of the administration of these types of funds is that the repayment rate is never going to be 100%. If there was no risk banks would be involved, not an organization like WCCBI. For years the Downtown Jamestown Development Corporation administered a revolving loan fund that helped small businesses in the Jamestown area while the Jamestown Local Development Corporation still administers a revolving loan fund. The JLDC fund doesn’t receive taxpayer infusions every year, yet is part of small business deals on a pretty regular basis.

In our view recycling money is better than writing taxpayer-backed checks every year. There are alternatives to doing so if local government chooses to examine them.