The West Bloomington Revitalization Project wants to build the economy with teeny tiny loans.
Bevin Choban is the secretary of the West Bloomington Revitalization Project and the Economic Development Committee chair, call it the chief loan officer, of the WBRP.
The project gave its first microloan a year ago to Rosy's Grill on West Market Street in Bloomington. Choban said they're trying again because the loan worked out.
"They used the money for things they needed for their business, new menus, a commercial grade refrigerator. Because of other circumstances they have relocated to Farmer City, Illinois. The West Market Street Council is working to redevelop that corner and with changes coming to the building, it was a good time for them to move. But the loan itself was successful. They were good stewards of the loan and repaid it in full. I'm hopeful it helped their family business," said Choban.
Microloans are no or low interest loans, typically of small amounts, to allow a single improvement or small expansion to a business.
"Sometimes $1,000 is appealing because it fits the need and it isn't as much of a burden or a responsibility to pay back. In that sense, I think there are a lot of businesses that might benefit from it. We hope they'll apply. It would be wonderful if budding entrepreneurs who would like to base their business in west Bloomington could do so," said Choban.
Nongovernmental agencies often use microloans in developing nations to build social capital or to give access to money to people who don't qualify for traditional loans, such as women and ethnic minorities.
"There is a lot of opportunity for redevelopment in west Bloomington. It was cited as an area in need of redevelopment by the 'Bring It On Bloomington' Comprehensive Plan. WBRP wants to support that goal. We have a lot of small businesses already existing in west Bloomington, restaurants, service providers, hair stylists, barbershops, that sort of thing. We would love to attract more," said Choban.
Some scholars and economists say the tool needs to be used with care, that it can result in a cycle of dependency, in which small businesses rely on the microloans to stay open. Choban said WBRP tries to be intentional in choosing and vetting candidates.
"We bring together a selection committee that's composed of residents of west Bloomington, our fellow board members, and a few local financial professionals, folks who work in the realm of finance and lending, to know who is a good person for that investment" said Choban.
Some of the things WBRP looks for, Choban said, include basic best practices to show financial readiness, separate business and personal financial accounts, and a business plan.
Choban said the revitalization project hopes to solidify existing businesses on the west side of town and eventually encourage new businesses to locate there.
"That can be an attractive thing for a small business, especially considering sometimes what they need or would like to improve their business doesn't require tens of thousands of dollars or even into the hundreds of thousands, which is sometimes a more typical line of business credit with a traditional loan through a traditional bank," said Choban.
Choban said the deadline to apply for a microloan through the West Bloomington Revitalization Project is Feb. 14.
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