ART loan program for businesses ready to go
Many issues delayed rollout of low-interest lending, development officials say
After months of waiting, small businesses along the Albuquerque Rapid Transit project corridor can now start applying for low-interest loans to offset financial losses they’ve suffered due to construction.
Those businesses will be able to receive up to $15,000 in loans if they meet certain criteria.
And the loans will be forgiven if the businesses have made their interest payments, are still operating on Central Avenue a year after ART has been completed, and have been working with the Small Business Resource Collaborative.
If an operation goes out of busi-
ness, it would be required to pay back the loan.
The city announced the loan program last year and had initially hoped to launch it about six months ago. Since then, several timelines for the program have come and gone.
City Economic Development Director Gary Oppedahl said Thursday that the kinks have finally been worked out, and the city plans to roll out the Central Loan Fund today.
“We want to make sure that the small businesses, the locally owned businesses, can stay and welcome new businesses as infill into the corridor,” Oppedahl said. “We don’t want to lose our small businesses and have big boxes come in. ... We want to keep the character and the culture of the businesses that are already there.” The loan program is part of that effort, he said.
He said a loan program like this has never been offered in New Mexico.
Among the issues the city had to work through, Oppedahl said, is the state Constitution’s Anti-Donation Clause, which prohibits state and local governments from giving anything of value to private individuals.
Autumn Gray, communications manager for the city’s Economic Development Department, said each time the city was going to launch the loan program, another issue would come up.
“We finally had our breakthrough this week,” Oppedahl said. He said that while city officials were eager to get the program launched, they knew they had to resolve all the issues before doing it.
The loan fund currently contains more than $700,000, Oppedahl said. The bulk of that funding is coming from the McCune Charitable Foundation, although the city is working to
line up more contributions to the fund.
“Our goal is to cover loans for all businesses that qualify,” Oppedahl said. “We believe that’s going to be between $700,000 and $1 million.”
Gray noted that while the city is serving as a catalyst for the loan program, it is actually private contributors that are funding it and nonprofits that will be operating it.
SBRC will work with businesses on the loan application process, and WESST, a statewide nonprofit that works with startups and existing businesses and has experience in managing loan portfolios, will administer the loan program.
Kim Blueher, WESST’s vice president of lending, said interest rates for the loans would be 3 percent, less than half of the rates being charged by banks for regular commercial loans.
Loan proceeds may be used for basic expenses, payroll, inventory, rent and mortgages, utilities, taxes, marketing and insurance.
Only small businesses with no more than $2 million in annual revenue qualify. The loans are also only available to local, independently owned businesses with four or fewer locations. Businesses must have also operated on Central between Louisiana and Coors — or within a block of Central — for at least two years before ART construction began.
In order to qualify, businesses must also:
Rely heavily on walk-in traffic and ■ not be an appointment-based business.
Demonstrate a decline in revenue ■ over two consecutive months during ART construction.
Have been in good financial standing ■ before the project began.
Be able to show that actions have ■ been taken to reduce expenses.
And be working with SBRC to ■ implement marketing and customer retention strategies to lessen the impact of ART.
Vanessa Roanhorse, program manager of the SBRC, said her team has been meeting with businesses along the ART route for 14 months trying to engage them. She said her team has been helping businesses look at their costs, marketing efforts and business practices and connecting them with other organizations that can help them.
She estimates that of the 800 to 900 businesses along that corridor, 374 to 400 of them could be eligible for loans.
Asked to respond to criticism that the amount of the loans won’t be enough to keep the doors of a struggling business open, she said, “This loan was never supposed to save them or cover all of their losses and costs. This loan is really just a small safety net to help them get through and manage operations.”
Because the program is being operated by private nonprofits, information on which businesses receive loans will not be released, Oppedahl said, though he said information on the types of businesses receiving loans would likely be made public.
ART will transform Central Avenue into a rapid transit corridor with a nine-mile stretch of bus-only lanes and bus stations. It is scheduled for completion by the end of the year.