Meriden-based group to run Norwich revolving loan fund

Norwich - The Meriden-based Community Economic Development Fund was selected Thursday to run the city's $1 million revolving loan fund, one of three downtown revitalization programs approved by voters.

The Norwich Community Development Corp. board of directors unanimously endorsed CEDF's proposal to run the revolving loan as a guaranteed-loan program that is expected to bring more private investment dollars to downtown through banks and other funding institutions.

With the selection Thursday, NCDC will start working with business owners interested in applying for the loan immediately. Applications should be ready in August, and CEDF should be on board to process loans by September.

The revolving loan fund is one of three downtown revitalization programs approved by voters in a referendum.

NCDC officials already are taking applications for building-code improvements in a $1.84 million matching grant program to property owners and a $500,000 rental subsidy program for downtown commercial facilities.

NCDC Executive Director Robert Mills said the city's money would be used as a 50 percent guarantee to primary lenders willing to work with start-up businesses and small businesses expanding in downtown Norwich. The city's money - up to $50,000 for a maximum loan of $100,000 - would be held until the loan is paid off and then released back to the city for future loans.

With the guarantee in place, businesses may be able to obtain more favorable loan terms from the bank or qualify for higher loan amounts, Mills said.

CEDF is a private, nonprofit agency established in 1994 to provide nontraditional loans to small businesses that can't qualify for traditional loans, said Scott Arnold, director of lending.

CEDF already has a presence in eastern Connecticut, with a $4 million loan fund in partnership with several local banks.

Arnold will run a loan information session at NCDC from 11 a.m. to 1 p.m. on Sept. 15 to discuss the loan-application process. To register for the program, contact Marie Dumas at m.dumas@cedf.com or (888) 835-2333.

The Southeastern Connecticut Enterprise Region, based in New London, and Hamden-based Connecticut Community Investment Corp. also applied to run the loan fund.

CEDF will receive a fee of $100,000, or 10 percent of the $1 million, to administer the program. Mills said all three proposals had similar administration fees.

"Their mission is about community development and small business development," Mills said. "They're very supportive of entrepreneurs and first-time business people."

c.bessette@theday.com