Stonington waits for $150,000 to boost Micro Loan Program

Posted June 28, 2009, at 8:13 p.m.
Last modified Jan. 30, 2011, at 12:05 p.m.

STONINGTON, Maine — The town is in line for a $150,000 Community Enterprise Grant that will provide a boost to the town’s existing Micro Loan Program.

The town’s application has been approved in Phase 1 of the grant process, but some paperwork needs to be completed before funds can be released. Town Manager Kathleen Billings-Pezaris said the letter from the Maine Department of Economic and Community Development indicated the town will move forward in the appli-cation process, and that $150,000 has been reserved for the program.

Billings-Pezaris said she and Emma Miran, an Island Institute fellow who works with the town on economic development issues, were putting together the necessary paperwork to complete the grant process. She said the grant funds would give the town the resources to help local businesses and individuals during these tough economic times.

The town’s Micro Loan Program has been in effect since it received state funding in 1994 for a joint program with Isle au Haut. The program split between the towns two years later. Over the years, the Stonington loan program has provided between 15 and 18 loans to a variety of fishing and retail businesses in the town. The loans have averaged between $5,000 and $17,000. The program currently has six outstanding loans, including three that were approved in the past few months.

The current economic situation has increased the need to help local businesses and individuals, she said.

“The demand has gone up in the past year, especially in the last six months,” Billings-Pezaris said. “We’ve seen an increase in the number of applications we’re getting.”

The loans the program has funded often have gone to businesses that did not qualify for regular bank loans, and sometimes have been used to add to a bank loan.

“It’s been pretty impressive what it’s been able to help people to do,” she said.

Loans are repaid over time with the funds going back into the program for new loans. A committee oversees the program and approves the loans. It has had a good track record on loan repayments, Billings-Pezaris said. The existing loan program has about $80,000 available.

With the new funds, she said, town officials have considered the idea of creating a two-tier program. The new grant funds have to be administered under strict federal guidelines. The existing funds, however, are considered town funds, giving the town a little more flexibility in how they are used. Those existing funds, she said, could be available for individuals who do not meet the federal guidelines — including income guidelines.

The new grant funds should be available sometime in August, she said.

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