Department of Commerce Unveils Forgivable Loan Program to Boost Commercial Corridors

The Baltimore Avenue Dollar Stroll in University City attracts thousands to this small business corridor. (photo by Conrad Erb courtesy of University City District)

Yesterday, on the 18th floor of 1515 Arch St., small business owners and representatives crowded into a meeting room to hear details about a new program by the Department of Commerce that is offering “forgivable loans” ranging from $15,000 to $50,000  to eligible retail, food, and creative nonprofit and for-profit businesses.

Jonathan Snyder, a senior manager at the Commerce Department, explained at the meeting that the loan did not need to be repaid if the business stayed open and continued to provide services to the neighborhood after five years.

“If they go out of business before that time, then they have to pay back the principal balance,” Snyder told Generocity.org. “So this is a zero renewal percentage rate, zero monthly payment loan that at the end of five years kind of turns into a grant.”

Snyder added that in the case of a restaurant closing, for example, the loan does not need to be repaid if a new restaurant, or similar business, is started in the same location.

In addition, businesses must be located in a commercial corridor that is eligible for Community Development Block Grants (CDBG). This qualifies about 60 commercial corridors from all parts of the city, according to a list attached to the program’s application. Vacant properties are eligible but must have tenets within 6 months of loan approval.

Projects will also be evaluated based on their ability to expand business activity, employment and foot traffic in the surrounding corridor. Other factors include whether the project has community support and whether it addresses an unmet need in the community.

“Anything that is helping to attract people or draw people into an area and helping the overall commercial corridor thrive and improve, that is what we are looking for,” Snyder said.

Snyder expects that the program will be ongoing and fund around 10-12 projects a year. Full guidelines and applications can be found here and embedded below.

Forgivable Loan Program: Guidelines

Forgivable Loan Program: Application