The Hidden Cost of Construction
Tempe will lighten the load for businesses on a light-rail line.
Mom-and-pop businesses along a future light-rail line through Tempe, Arizona, may be able to borrow up to $20,000 at reduced rates. The city, along with the chamber of commerce and a financial institution, has set up a credit line at 1 percent over prime for those adversely affected by construction of a new transit line.
Tempe has committed $100,000 to cover any business defaults. However, since the program is a line of credit, not a loan, if a business fails to make payments, the credit line can be shut off to protect both the lender and the city.
Some 300 businesses are vulnerable to a downturn in sales or other negative impacts as trenches are dug outside their door, large trucks move about in the area or traffic is rerouted. In order to qualify for the line of credit, they have to have been at their location more than two years and have been profitable 12 months prior to getting their line of credit approved. "If a business is otherwise on a track for failing, we don't want them to go into more debt," says Dan Henderson, economic development specialist with the city.
The light-rail line is not expected to be completed until 2008 and businesses will have access to the funds during the entire two- to three-year period. The loan program could be used during utility relocation or other work during the project.
Mesa and Phoenix are looking into similar programs for small businesses along their portion of the light-rail line.
Join the Discussion
After you comment, click Post. You can enter an anonymous Display Name or connect to a social profile.
LATEST FINANCE HEADLINES
The City as Consultant1 day ago
How Bloomberg’s Still Changing the Way Cities Operate1 day ago
New York Budget Deal Includes Ethics Reforms15 hours ago
Districts Try to Block Kansas' School Funding Law15 hours ago
The Week in Public Finance: Taxes, Drought and a Nod to the Baha Men3 days ago
States Trying to Figure Out Whether Entertainment Tax Credits Really Work3 days ago