Applications are being accepted for a lending effort aimed at helping small businesses in downtown Wilmington.
Monday, Wilmington Downtown Inc. (WDI) announced that it has launched its new microloan program
. The program will draw from a reservoir of funds originally given to the city of Wilmington in the 1980s as a Department of Housing and Urban Development (HUD) Community Development Block Grant (CDBG).
WDI has been the caretaker of those funds for decades, according to Holly Childs, WDI’s president and CEO.
The microloans are for a maximum of $20,000 and have a maximum term of five years. The first payments can be deferred for six months. To be eligible for a microloan, a business must be located in one of the 12 existing or emerging downtown districts, Childs said.
There is considerable flexibility in how the money can be used, she continued. For example, funds can be applied to rent or operating expenses, used to purchase inventory or to enhance a business’s e-commerce capabilities.
WDI is especially eager to get microloan program information to minority-, woman- and veteran-owned businesses, which have statistically been among the hardest-hit by the impacts of COVID-19.
Raleigh-based Civic Federal Credit Union will handle the underwriting and servicing of the loans, according to Childs.
In former years, WDI used the HUD money to operate a capital improvement loan program that was targeted at upgrading downtown physical facilities, she said, explaining that the loan recipients were usually developers or building owners. The last of those loans, which were available for up to $100,000, was paid off in 2018.
“Today, most developers need millions of dollars, not thousands of dollars,” she said. “We are also finding that the program was getting money to developers and building owners but not to the business owners themselves. We want to invest in those businesses to keep them downtown."
Because the city of Wilmington was the official recipient of the HUD CDBG money, WDI had to petition the city to approve the change in its loan program. With that approval in hand, WDI has access to a loan fund of about $568,000.
Since the new program’s application period opened Monday, Childs said she has heard from several potential applicants.
“We are doing the intake, and we have an intake form,” she said. “We have to make sure [an applicant business] is located in a designated [downtown] district. And they have to be a commercial business, not a nonprofit.”
For information on the WDI microloan program, email [email protected]