Officials Hope Loan Initiative Will Bring Homegrown Businesses Downtown
Posted July 14, 2006
RALEIGH, N.C. — Steve Hunt has worked in restaurants, but now he wants to own one. For him and his partners, opening the Big Easy on Fayetteville Street is a big undertaking. Fixing up the 1900's-era building cost nearly $500,000.
"That's just to get it open," said Hunt. "We are cutting corners if we can. It's a very expensive ordeal."
The Downtown Raleigh Alliance is pitching a new type of low-interest loan pool involving 15 local banks. The money would pay for building improvements.
The renter wouldn't start making payments on the loan for two years, once the start up business is more established.
"We want to be eclectic," said Nancy Hormann with the Downtown Raleigh Alliance. "We want to be cool. We want to attract the mom-and-pops, indigenous North Carolina retail here, so this is really how we get what we want instead of getting whatever comes."
Downtown advocates said the loan pool is needed. However, they also said 50 percent of all businesses who want to locate in the area can't because of the cost to improve old buildings.
Supporters said that many times, affordable loan pools are the only way for small businesses to be pioneers downtown.
"If you were to come to a bank and say, 'I want to rehabilitate this empty building that's been empty for 15 years,' they are probably not interested in doing it," said Brad Frazier with Community Investment Corporation of North Carolina. "With a loan pool, you spread risk and allow capital to come in and serve people who may not get traditional financing."
"It would be great for people just like us who don't have a lot of money to start with," said Hunt.
The city of Raleigh offers loans for start up businesses downtown. Owners have to start paying it back within a few months.
The loans are only available for buildings larger than 5,000 square feet. That typically excludes small businesses from being eligible.