WDI launches microcredit program for downtown businesses
Applications are accepted for a loan effort to help small businesses in downtown Wilmington.
On Monday, Wilmington Downtown Inc. (WDI) announced the launch of its new microcredit program. The program will build on a pool of funds initially granted to the City of Wilmington in the 1980s as a Community Development Grant (CDBG) from the Department of Housing and Urban Development (HUD).
WDI has been the custodian of these funds for decades, according to Holly Childs, president and CEO of WDI.
Microloans are for a maximum of $ 20,000 and have a maximum term of five years. The first installments can be deferred for six months. To be eligible for a microcredit, a business must be located in one of 12 existing or emerging inner-city neighborhoods, Childs said.
There is considerable flexibility in how the money can be used, she continued. For example, funds can be used for rent or operating expenses, used to purchase inventory, or to improve a business’s e-commerce capabilities.
WDI is particularly keen to provide information on microcredit programs to minority-owned businesses, women, and veterans, who have statistically been among the hardest hit by the impacts of COVID-19.
The Raleigh-based Civic Federal Credit Union will handle the underwriting and servicing of the loans, according to Childs.
In previous years, WDI had used HUD money to run a capital improvement loan program aimed at upgrading physical facilities in the city center, she said, explaining that the loan recipients were usually developers or building owners. The last of these loans, which was available up to $ 100,000, was repaid in 2018.
“Most developers today need millions of dollars, not thousands of dollars,” she said. “We’re also seeing that the program was making money for developers and building owners, but not for the business owners themselves. We want to invest in these businesses to keep them downtown. “
Because the city of Wilmington was the official recipient of the CDBG HUD money, WDI had to ask the city to approve the change in its loan program. With this approval in hand, WDI has access to a loan fund of approximately $ 568,000.
Since the application period for the new program opened on Monday, Childs said they have heard from several potential applicants.
“We do the admission and we have an admission form,” she said. “We have to make sure [an applicant business] is located in a designated location [downtown] district. And they have to be a commercial enterprise, not a non-profit. “
For more information about the WDI Microcredit Program, send an email [email protected].