RICHMOND, VA (WWBT) – Richmond leaders say they have a new a tool to help new businesses flourish in the city.
Starting in July, the city will offer loans to help entrepreneurs, developers and small businesses get the money they need to set up shop in Richmond. It's called a revolving loan program, meaning, the city will lend money that has to be paid back with interest. As the funds are paid back, the city will put that money back into the loan program and use it to make more loans.
"If you're a small business, if you're an entrepreneur that is looking to expand, and you've had difficulty getting conventional financing this could be a resource for you," said Peter Chapman, deputy Chief Administrative Officer for Economic and Community Development in Richmond.
The city is setting aside $1-million for the first loan program. The loans will range from $25,000 to $100,000 and will be specifically for women and minority owned businesses.
"We're talking about businesses that have had some persistent challenges in the market place," said Chapman.
The second loan program will have a $2-million pool. Those loans will be larger, going up to $500,000. The loans will be offered city wide to entrepreneurs and real estate developers.
"If we want to facilitate good economic development (and) good neighborhood revitalization, we have to be creative about the tools and resources that we use to incentivize that kind of development," added Chapman.
The loans have to be repaid to the city and interest will range from 2% to 9%, depending on the size of the development and the company's credit. Earl Bradley owns a property management company. He says as long as the city uses the loans as advertised, he'd be one of the first apply.
"I can really expand and really hire more folks you know, to do all the things we need to do," Bradley said.
The loans were passed as part of the city's budget, so they won't take effect until July 1. City leaders say they are still working out the details but may begin accepting loan applications around mid-July.