ELLSWORTH, Maine — The city will apply for state grant funding to continue a popular program to improve storefronts in the urban core area and to create a new microloan program for local businesses.

According to City Planner Michelle Gagnon, Ellsworth will apply for a $150,000 Community Enterprise grant through the state’s Community Development Block Grant program. City councilors on Monday approved the submission of the application.

If its application is approved, Gagnon said, the city would allocate $130,000 of the grant toward the facade program and $20,000 for the microloan program.

Based on an informal survey, Gagnon said there continues to be a lot of interest in the facade program, which the city has offered since 2004. The program has funded exterior improvements throughout the city’s commercial district over the years. While much of Ellsworth’s focus has been on preparing for major new developments beyond the Triangle, Gagnon said, it also has made sure that other commercial areas do not deteriorate and that small businesses remain viable in the city.

“We have tried to pay attention to the older commercial areas, downtown and the High Street strip,” she said. “They are a vital part of the city’s economy. These grants target the entire urban core area so that we can ensure that all areas of Ellsworth remain alive, vital and strong.”

Kevin Tessio, president of the Ellsworth Area Chamber of Commerce, spoke in favor of the grant and the facade program.

“This is certainly a beneficial program,” Tessio said. “It’s a great opportunity for businesses to continue to grow within the city.”

The city stands a good chance of receiving the loan due to the past successes, Gagnon said.

“We have a good track record, and we have two fully certified administrators in the city,” she said. “We have a team of people with experience working with CDBG funds. That means we can administer the program with no costs, so all of the grant funds go into the program.”

The new microloan program will be available to low- and middle-income business owners, and can be used for a variety of projects to help those businesses remain viable and to create and retain jobs.

While the facade program strictly targets exterior and other physical improvements, the microloan will have more flexibility and allow businesses to use funds for a variety of projects or purchases, Gagnon said.

“It’s very open as to what we can do with the funds,” Gagnon said. “We’re really very excited about this.”

She stressed the program is not designed to compete with banks or other funding programs, but to provide funding to businesses that might have difficulty obtaining money from those other sources.

The two programs to be funded through the grant work differently. Under the facade program, a portion of the grant to a business is forgiven for each of five years the business remains in the same ownership. After the fifth year, the debt is forgiven completely.

The microloan program is a low-interest loan program. The payments from the businesses will go back into the program to fund future loans.

Gagnon said the city’s planning department also is working on a plan that would allow businesses to combine a facade grant and a microloan.

The city’s planning and economic development departments already have discussed the programs with potential business participants, but Gagnon said they are anxious to hear from other business owners who might be interested in either program. Interested business owners can contact Gagnon at 669-6608.