ITHACA, N.Y. –– In order to help businesses struggling due to the COVID-19 pandemic, the City of Ithaca has launched a recovery loan fund aimed at “anchor” storefronts –– providing low-cost economic development loans of between $8,000 and $50,000 to key commercial storefront businesses in the city.
“The idea behind it was that businesses that have a certain presence in the community carry a high level of importance to the success of their commercial district, and also to the image of the community. If we have a lot of commercial storefront that become vacant –– especially highly visible, central storefronts –– then that’s bad because the image of the community and our economic success wouldn’t be where we wanted it to be,” said Thomas Knipe, the City of Ithaca’s deputy director for economic development.
To be considered an “anchor” business, you must provide a unique service that would be difficult to replace if the business were to permanently close, have a sizeable footprint (1,200 sq ft or more) and highly visible “anchor” location (a corner or a prominent storefront in a facility with other smaller tenants, etc.), be a traffic generator (i.e. attracts people to the commercial district) and have been in business for five or more years and be viewed as a community “institution.”
Anchor businesses include both restaurants and retail businesses.
The Ithaca Anchor Storefront Recovery Loan Fund provides targeted loan assistance with one year of interest-only payments, which then converts to a 5-year loan with 60 equal monthly payments and a 12-month draw-down period. The loans also come with an extremely low-interest rate of 1.25% in order to ensure that businesses in need are able to confidently take part in the program.
“Those are terms a business would be unlikely to get from the bank or any other funding source,” Knipe said.
The initiative to establish this fund was facilitated by the City of Ithaca Office of Economic Development in collaboration with local economic development agencies including the Downtown Ithaca Alliance, Tompkins Chamber and Small Business Development Center. The money for the fund comes from private individuals connected through the Community Foundation of Tompkins County.
“We’ve been doing a lot of work to try and support local businesses through COVID, and we led the initiative to develop the small business resiliency fund in April/May and that was sort of designed as emergency funding and forgivable loans,” Knipe said. “But we knew we wanted to try and do more with local funding to support recovery. Basically we had the idea for the loan fund and then we shared it with some local foundations it was through those referrals that private individuals decided they wanted to support the fund.”
There is about $360,000 dollars in the fund so far to be distributed. The minimum loan application is $8,000, and a maximum of $25,000 for businesses with up to $1.5 million in gross annual revenues, or up to $50,000 for businesses with up to $3 million in gross annual revenues.
The loans are being distributed through Ithaca Neighborhood Housing Services (INHS). A volunteer loan review committee comprised of business owners, financial/lending experts and economic development experts will make loan recommendations to INHS.
Interested businesses can visit the INHS website to download the full program guidelines and application and access information about how to apply here. Eligible businesses are invited to apply by Sept. 2 to be considered in an initial round of application review.