Atlanta City Council will vote next month on a new small business loan program to help businesses that might not otherwise qualify for low-interest loans.
The Community Loan Fund is meant for small and micro businesses that have been unserved by traditional loan programs, such as those run by Invest Atlanta, the city’s economic development agency which would administer the new fund.
Loans would have a flat 3-percent interest rate and a three-month deferment period. Approval criteria is still being discussed, but the money can be used to buy property, equipment, fixtures, inventory, renovate buildings or as working capital, according to a fact sheet provided by Invest Atlanta.
The maximum loan amount is $30,000 for inventory and working capital; $50,000 for other costs, the fact sheet says.
And unlike Invest Atlanta’s programs, Community Loan Fund money can be used to pay off business debt or personal debt incurred by entrepreneurs denied business financing, according to a resolution passed unanimously earlier this month by the council’s community development and finance committees.
Councilman Antonio Brown worked on the legislation for two months in tandem with Mayor Keisha Lance Bottoms' administration and Invest Atlanta staff. The full council is expected to vote on it Aug. 5.
Brown said common business loan criteria — such as requiring businesses to have operated for at least two years and have a business rating and credit score — are impractical for new businesses. His goal is to make the program as accessible as possible, and said it would help prevent business owners from risking their personal credit on their companies.
Most small businesses don’t qualify even if they have a viable business that’s operating,” Brown said. “This loan (program) will give those small businesses an opportunity to still apply and potentially receive funding to help sustain, scale and grow their business.”
Brown, who is the owner and founder of a clothing line, said he used his own experiences to help draft the proposal.
Prior to his clothing brand LVL XIII launching in Bloomingdale’s, Brown said he had a hard time securing funding for the purchase order, and went through a lot of “bureaucratic red tape,” to get it.
“Through that experience, I realized that we have to start redefining lending criteria for small businesses because they’re the heart of our economy,” he said. “Small businesses hire every-day, hard-working people.”
