Small Business Loans

The Small Business Development Loan Program (SBDL) is designed to provide financial assistance for small business concerns and nonprofit organizations to expand employment opportunities, stimulate private investment and eliminate slum and blight conditions in selected areas of the community.

CFR Part 570, City of Springfield General Ordinance 4743, City of Springfield Special Ordinances 25095 and 25447

Eligible Activities
Loans may be issued by the city to small business owners, nonprofit organizations, and real estate developers within project areas for several activities, including:
  • Acquisition of property and buildings
  • Clearance and removal
  • Historic preservation
  • Machinery / equipment
  • Mixed use development
  • New construction
  • Rehabilitation
  • Relocation
  • Residential rental rehabilitation
Meeting a National Objective
The Small Business Development Loan Program is funded through the federal Community Development Block Grant program and through loan repayments. All projects funded through this program must meet one or both of the National Objectives in accordance with 24 CFR 570-208, summarized as:
  • Principally benefiting low and moderate-income households by meeting identified service / product needs of such households residing in the target area, or by providing job creation or retention
  • The jobs must be new and filled by persons who were low-moderate income at the time of hiring
  • Generally, 1 full-time equivalent job must be created for each $35,000 loaned
  • Aiding in the preservation or elimination of slums or blighted conditions within the target area

Program Benefits
Loans are available for eligible activities in the following areas:

  • Boonville Avenue
  • Commercial Street Historic District
  • Downtown
  • Walnut Street Historic District
  • Westside Neighborhood
In addition, job creation projects may be funded in a broader area generally bounded by Glenstone Avenue, West Bypass, Grand Street, and Kearney Street / I-44 if it is determined that significant benefit to low-moderate income persons will occur only if the loan is approved.

There is no maximum loan amount, except the loan shall not exceed the actual cost of the rehabilitation and/or development costs of the project.

Loan Terms
  • Ninety Day LIBOR (London Interbank Offered Rate) plus 95 points per annum simple interest, adjusted monthly
  • 5% minimum interest rate
  • Secured by appropriate collateral and personal guarantees
  • Negotiable amortization, with principal due in 20 years
  • Loans generally not assumable
Approval Process
A Loan Committee comprised of senior staff personnel assigned by the Director of Planning and Development reviews and evaluates all loan applications. The committee is provided legal counsel by an Assistant City Attorney.

Strict and lengthy federal environmental review regulations apply, prior to the commitment of any funds to a project, whether public or private.

Applications must be submitted on the application form approved by the Loan Committee. The City Redevelopment Review Team shall review all properties and provide written comments to staff on projects requesting loan assistance for property acquisition, construction or rehabilitation.

Committee Involvement
City staff works with the developer on construction and rehabilitation projects to provide a work write-up and cost estimate. The committee may request that the applicant submit redevelopment bids for contractor / contract approval. Based upon the information submitted, the Loan Committee shall either approve or disapprove the application. The applicant may appeal any decision of the Loan Committee to the Land Clearance for Redevelopment Authority Board of Commissioners.

Small Business Development Loan Policies
The Rules and Regulations for the Small Business Development Loan Program was adopted by City Council as Special Ordinance 25447 and provides extensive guidance on this program. That document is included in the Resource Guide and is incorporated herein as Policy for the Small Business Loan Program.

General Policies
All projects will be reviewed for consistency with both the policies for the desired incentive as well as the general policies listed on the Overview and General Policies page.