Community Development Loan Program

 If you have an existing or start-up business in Bowdoinham, are in need of a loan to help your business thrive,  and meet the criteria below, please contact us to explore the possibility of a low-interest flexible-term loan!

(BCDI has recently completed two new Community Development Loans, bringing the total loaned through this Neighbors-Investing-in-Neighbors program to over $89,000 – Thank you Bowdoinham!)

One aspect of BCDI is a loan fund linking small enterprises in Bowdoinham to neighbors who are willing and ready to invest in a local undertaking that will benefit the individual and the community. The focus is on farms, food, forests, the music and art that accompany them and the businesses that support those sectors. The proposed loans are very low interest with flexible repayment terms tailored to meet the specific needs and capacities of the beneficiary. The amount of a BCDI Loan may be a minimum of $500 and maximum of $15,000. The repayment of the loan is expected within 12 months of disbursement, with a maximum repayment time of 24 months. (These terms may be adjusted as the fund matures).

BCDI  has found that a number of town residents are interested in participating in the fund. The approval of an application by the BCDI Board, after vetting the request through a screening committee, will trigger a solicitation of the required funds from Members of BCDI who are potential investors, the receipt, disbursement, collection and accounting of those funds, as well as the distribution of repayments and accrued interest. Twelve loans have been made so far, with several new loans currently in the pipeline. All loans due have been fully repaid.

How to Apply for a Loan

A loan application consists of the following:

1. A narrative that includes a description of the entity requesting the loan, the purpose of the loan, the anticipated time and modalities requested to repay the loan, how the loan will benefit the enterprise and the community.

2. Evidence of collateralization for the loan.

3. Evidence of the capacity of the entity to repay the loan in the proposed timeframe.

The Screening Committee may require supplementary documentation for final loan approval.

Criteria for approval of a loan application by the Screening Committee

1. The loan appears to be needed.

2. The loan will allow the applicant to undertake activities that will benefit the community as well as the applicant.

3. There is sufficient evidence that the loan applicant will be able to repay the principle and interest of the loan in the proposed timeframe. (These conditions will be established by the Screening Committee  in consultation with the applicant.)

4. The standard interest rate will be set at 3%: 2% will be the return to the investor;  1% will be retained by BCDI to help cover operational costs. BCDI may consider additional/alternative “interest” on the loan in terms of benefit to the community that flows directly from implementation of activities supported by the loan.  (These conditions will be established by BCDI in consultation with the applicant.) The BCDI Board will also require a fee of not more than $50 for managing the loan process.

5. The collateral offered by the applicant is acceptable.

6. Due diligence by the Steering Committee has established sufficient documentation to support the bona fides of the application.

7. The applicant is a Member of BCDI.

If you have a business in Bowdoinham and are interested in the loan program, please contact BCDI.

Posted in Programs & Projects