The city's main economic development agency will hold a 4 percent loan sale to help small businesses pay soaring winter utility bills and stimulate neighborhood commercial districts.
The temporary program will pump money into the city economy at less than half the Buffalo Economic Renaissance Corp.'s current 10 percent loan rate. Underwriting standards to qualify for BERC loans will not be changed.
The sale is preliminarily scheduled to run March 15 through April 15, although details are still being finalized, BERC officials announced during a meeting Wednesday.
"We can get some money back into the economy and help small businesses that have paid some of these difficult costs. We wanted something that was fast, easy and a quick turnaround to help small businesses in these difficult times," said Buffalo Mayor Anthony Masiello, who chairs the BERC.
The city agency has conducted about 75 one-on-one feedback meetings with business owners over the last two months. High energy costs have been a topic frequently raised by business owners during those meetings, BERC officials said.
The agency will use its pool of $1.2 million in federally sponsored business and community development funding to make the loans. The cap for a loan will be set between $50,000 and $100,000, BERC President Alan H. DeLisle said.
"We really want to target the neighborhood commercial districts," DeLisle said.
The discounted rate will only apply for 12 to 18 months. After the discount term expires, outstanding loans will revert to BERC's standard rate of the prime lending rate plus 1 percent, which currently equals 10 percent.
In other business, Masiello said the city plans to "pursue all legal options" to collect an outstanding $100,000 secured loan to Empire Brewing Co.
The restaurant and microbrewery closed abruptly earlier this month without prior notification to the BERC. The Rochester-based company has four years left on a five-year lease with BERC for space at 623 Main St.
DeLisle said the agency will attempt to collect $240,000 in unrealized revenue for the remainder of the lease period.
The agency has much smaller financial exposure in Empire Brewing than it did in Breckenridge Brew Pub, a similar restaurant which operated at the same Theater District address before closing in 1998.
BERC lost a $600,000 unsecured loan in Breckenridge.