CUMBERLAND — A new loan program might soon be available for small businesses in the city.
At Tuesday’s mayor and City Council work session, Cumberland Administrator Jeff Silka presented a draft plan to loan money to current and new independent enterprises.
He proposed the city use $100,000 remaining from a past loan program to assist small businesses with funding they might not be able to secure elsewhere.
The Micro-Revolving Loan Fund would target city businesses that employ fewer than 100 workers and offer $2,000 to $10,000 loans for 24 to 60 months at 3% interest.
“It does get us money back,” Silka said of profit the city would make that could be recirculated into new loans.
The funding program would be open to accept higher risk applicants than conventional financing.
The loans could be used for reasons including building improvements, business relocation and machinery purchases, but not to buy new real estate.
It would require applicants to be invested, understand their financial obligation, submit a business plan, and be in good standing with the state and city.
Applicants would be urged to work with the Small Business Development Center at Frostburg State University, which offers free services, to develop a business plan and financial information.
A loan review committee would be established to recommend approval, denial or request additional information.
The committee would include the city comptroller, representatives of the Cumberland Economic Development Corp. and Downtown Development Commission, and members of City Council and the banking community.
The loan program is expected to be formally presented to the council at a future meeting.
Cumberland Mayor Ray Morriss said he likes the idea of having the local SBDC involved.
“That’s the key to me,” he said and added the organization is a great tool. “I like it. I think it’s a good idea.”
Teresa McMinn is a reporter for the Cumberland Times-News. She can be reached at 304-639-2371 or email@example.com.