MOORESVILLE – At its regular meeting of March 20, the Mooresville Board of Commissioners was introduced to a loan program that aims to provide financial assistance to downtown Mooresville businesses and business owners.
The Economic Development Incentive Loan Program is a pilot program that will allot funds on a first come, first serve basis. The purpose of the initiative is to support business retention and job creation for town residents. Funding for the program will come from the Community Development Block Grant Program that provides communities with resources for community development needs on a federal level. CDBG funding is part of the U.S. Department of Housing and Urban Development.
“The program will be open to any Mooresville businesses who meet the requirements,” said Terrell Blackmon, community and economic development manager for the town. “This program is for both new or existing businesses.”
The loan program will also include for-profit commercial, industrial or service businesses that expand with the Town of Mooresville Municipal Service District or other designated redevelopment areas.
Loans can be used to finance land, buildings, new construction, renovation, expansion or conversion of facilities. However, the loans cannot be used to refinance debt, purchase inventory or pay non-capital costs. The program will require businesses to create one new, full-time, permanent job within three years of the loan closing for every $35,000 loaned.
“The goal is to fill a financial gap,” said Angel Wright-Lanier, Mooresville’s deputy town manager. “This is an opportunity for those in need of a little money to make a project (within their business) happen. It’s a chance to spur economic and community development.”
Loans will range from a minimum of $15,000 to a maximum of $75,000, up to 50 percent of total project costs with terms up to 10 years.
“If you want to open up a restaurant and you have a finance gap of $70,000 you can come to the town and apply for the funding, and we would look over your application,” Wright-Lanier said. “You have to qualify – it’s like going through an actual process, and if you qualify for the loan, we will give it to you. With every $35,000 received, they (business owners) will have to provide one full-time job.”
The loan process starts with a nonrefundable $100 application fee and an origination fee equal to 0.5 percent of the loan amount. Businesses must also provide a minimum of 10 percent equity and the business owner or majority stockholder must provide a personal guarantee for the loan amount. Additionally, at least 51 percent of the jobs created must be made available to low and moderate income persons, and businesses must demonstrate the ability to repay the loans as well as have adequate credit.
Wright-Lanier said the program “will improve choices for the businesses downtown and overall to help develop our downtown’s core and other areas. This would also (in turn) help our lower income citizens.”
The town board is set to vote on the program in the upcoming weeks.