Mayor Stephanie Rawlings-Blake is launching a micro-loan fund for small businesses in Baltimore, to help them hire and stabilize their businesses.
The effort, called BaltimoreMICRO, will enable small businesses with under $1 million in annual revenue to apply for loans ranging from $5,000 to $30,000. Retailers, service providers and contractors based in Baltimore are eligible.
The program appears to be targeting small businesses, including stores and restaurants, in city neighborhoods.
New stores and restaurants in neighborhoods "bring residents together and create a buzz that attracts people from throughout the region," Rawlings-Blake said in a statement. "We want that to happen in more of Baltimore's neighborhoods, and we must do what we can to support that."
Under the program, the business owner must have a minimum credit score of 650 to be considered for a loan.
Micro-lending programs are sprouting up around the country. Starbucks, the coffee retailer, launched its own micro-lending effort to support U.S. small businesses. Other nonprofits, such as Kiva.org, which allows people to make micro-loans to others in developing countries, is launching similar programs in U.S. cities, such as Detroit and Los Angeles.
In Baltimore, the initial cost of the micro-loan program will be borne by city and state taxpayers. It will be administered by the Baltimore Development Corp., the city's quasi-public development arm.
The Board of Estimates approved the city's $125,000 contribution to the fund, and also approved the city's application to the Maryland Department of Business and Economic Development for a $250,000 grant.
The city's program would be in addition to the U.S. Small Business Administration's loan guaranty programs for small firms. The SBA program will guarantee loans made by a lender to a small business, up to $5 million.
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