Wilmington Downtown Inc. aims to help more businesses through restructuring a revolving loan program backed by $550,000.
Wilmington City Council is slated to consider a resolution to amend an agreement with Wilmington Downtown Inc. (WDI) to change the existing Rehabilitation Loan Program to a microloan program, according to the council's agenda
The program, slated to be called the WDI Microloan Program, would allow greater distribution of loans to more businesses in the downtown Wilmington area through smaller loans, said Holly Childs, WDI president and CEO.
"Because we're restructuring the program, we're going to the city council to let them know what our intentions are for the program so that it's more utilized, not just sitting there," Childs said.
The last loan through the program in its current form matured in 2018, Childs said, adding that with the council's approval, WDI seeks to gain applicants to disperse as many loans to businesses as funds will allow.
Through the current loan program, established through an agreement with the city in 2002 under WDI's previous entity DARE, the Rehabilitation Loan Program offered a maximum loan amount of $50,000. Later in 2004, it was amended to increase the maximum loan amount to $100,000, according to the city.
WDI is looking to partner with Civic Federal Credit Union as the underwriter for the WDI Microloan Program and establish a maximum loan amount of $20,000.
"That will enable us to help 25 to 30 businesses rather than just a handful," Childs said.
"The loan will have a maximum term of five years, and the loan rate will be below prime -- right now we're clocking in at three-quarters of the New York prime rate -- so that's about 2.45% currently that the loan will be set at, fixed-rate for the five years," she said.
According to the city's agenda, eligible expenses that could be served by the loans would include inventory, furniture, fixtures, equipment and equipment repairs, up to three months of rent or mortgage payments, e-commerce capabilities and equipment needed to provide a safe and healthy environment for employees and customers.
WDI, with the loan program, also aims to go beyond the traditional bounds of what is known as the Central Business District (CBD), she said.
"Downtown is getting bigger," Childs said, adding that WDI also wants the program to help the growing, up-and-coming areas neighboring downtown.
The microloan program would be designed for business owners in the CBD, established commercial districts and emerging commercial districts such as the Soda Pop, South Front and Cargo districts, the city's agenda states.
"I think one of the best parts about the loan is that there are no payments for the first six months," Childs said. "So that really gives our small businesses time to get on their feet, post-COVID, and be able to make payments on some of these expenses and get through the rest of this and back to business."
WDI is working on setting up a basic loan application and a small review committee of three or four people, Childs said.
Should the city council approve the restructuring, WDI would aim for the application process to open by mid-March, she said.
"We've outlined the process. And we're certainly going to work through what the council's expectations are. Tomorrow night, we'll see if there are additional expectations [the city has], but our goal is to be able to turn a loan around in two weeks," she said.
"As long as the applicant has easy access to their financial information and can get that back to us quickly, then we can turn it around in two weeks. And then closing will also be [done] electronically," Childs added. "I think it's going to be a really great program for small businesses."
Wilmington City Council is scheduled to meet at 6:30 p.m. Tuesday at the Wilmington Convention Center, 10 Convention Center Drive.