Take a walk through downtown Carrboro and you’ll see the fruits, figuratively and literally in the case of Weaver Street Market, of the town’s Revolving Loan Fund.

Carrburritos, Cat’s Cradle, the Orange County Social Club and numerous businesses that help define the Paris of the Piedmont started or expanded their enterprises through the program.

“It’s helped create not only the jobs, but sort of the niche places, the really special places that have defined Carrboro,” says Annette Stone, Carrboro’s economic and community development director.

Since 2006, Carrboro government officials have provided aspiring local business owners of 11 ventures, such as coffee houses, hair salons, newspapers and delis, with $728,540 of low-interest loans from town coffers.

But this fall, after two of those businesses failed to flourish, the town will re-evaluate the way it doles out capital.

“I think there’s a desire to kind of take a fresh look at how we evaluate the loan, the business plan and the kind of feedback we are giving to businesses,” says Carrboro Alderman Dan Coleman, a liaison to the town’s Economic Sustainability Commission.

“I think there’s also some interest in some sort of mechanism for follow-up, which we haven’t had in the past. The application is fairly detailed and rigorous, but once the loan is signed, it’s sort of like, that’s it, they are out of the door and on their own now.”

For example, to qualify, applicants must prove that they will create or retain one local job per $10,000 borrowed, at least half of which must go to low- to moderate-income workers. However, the town doesn’t have any formal reporting mechanism to ensure the jobs are created.

In one case, the business failed to pay back any of its loan. The owners of The Original Ornament, a bead shop that opened in 1992 and moved to Carrboro in 1997, still owe $70,000 to the town. The Board of Aldermen approved a six-year, 3 percent loan for the business in February of 2009. It closed four months later, and the proprietor moved to Texas. Two months later the owners sold the business, which was redeveloped as the Bead Store in the same space. (The new owners are not responsible for paying back the loan.)

According to town records, current loans on the books range from four to 10 years at rates from 2 percent to 8 percent. Neal’s Deli netted the most money, $105,000, while Blu Icon, a salon, has the smallest loan at $18,000.

Brian Russell, a Chapel Hill technology advocate, started Carrboro Creative Coworking in 2008 after he was awarded a $90,000 loan at 2 percent for 73 months.

Coleman encouraged him to apply for funding after Russell pitched the idea on Orangepolitics.com, the local progressive blog founded by Russell’s wife, Ruby Sinreich. James Harris, then the town’s economic and community development director, helped Russell develop the idea and connected him with the N.C. Small Business Technology Development Center to write a business plan.

But, Russell says, in a rush to meet program requirements, he settled on the wrong space for Creative Coworking, one that lacked enough open room and instead functioned more as office rental space than the shared working areas he envisioned. The business will close Sept. 30, and Russell still owes almost $80,000 to the town.

“He was doing a very unique and pathbreaking kind of business,” Coleman says. “I don’t think anyone in town government or on the advisory board would have been able to anticipate these pitfalls.”

In August, the Board of Aldermen approved a loan modification for the business that allows Russell to pay the money back over 15 years at an adjustable rate: 0 percent for the first two years, 2 percent for the next two and 4 percent for the final 101 months,

Russell, who said he is grateful that the board agreed to “soften the blow” of losing his business, will liquidate office assets, which are valued at $24,458, to help reimburse the town.

“They care about people and their real goal is seeing businesses be successful. They understand that the economy is challenging right now,” Russell said. “A bank doesn’t care about how well the neighborhood does a year from now. The town obviously does. They are invested in it beyond just the legal and financial arrangement … I wish more governments on all scales would imitate that level of care. It’s definitely one of the best tools a town this size could have.”

Russell is now a member of the Economic Sustainability Commission, which reviews the loan applications prior to the Board of Aldermen’s decision. He says he would like to see the town provide more “holistic continuous support” for the start-ups that it funds. Russell wants business owners to be connected to online, targeted marketing professionals and to be better schooled, beyond just Quickbooks, in business accounting.

The town also approved a modification for the popular Neal’s Deli, which received its loan in 2007 after working extensively with the town and the N.C. Small Business and Technology Development Center to write a business plan. It opened in a space on Main Street that had been sitting vacant for two years.

Deli co-owner Matt Neal says that were it not for the fund, the deli might not have been started because the economy crashed shortly thereafter.

But the dip meant that business was slower than expected, and Neal wasn’t able to afford the payments set out in the loan.

“James Harris and I looked at the reality of our first years of being open, and we looked at this winter, we weren’t able to make these payments in time,” Neal said. “We worked out an arrangement where we made some not full payments, some partial payments, and that got us behind.”

The deli will be allowed to keep monthly payments at the same level and pay off the remaining debt in the last month of the loan.

On balance, the Revolving Loan Fund has been successful, town leaders said, and just needs fine-tuning. Leaders foresee funds being used to retain existing jobs, as well as creating new ones.

“We were really fortunate that the original funds were made available 25 years ago, and the fund has expanded over the years,” Coleman says. “We hope to have the opportunity to support a lot more businesses in the future.”