The Buda Economic Development Corporation, or Buda EDC, is set to launch a program offering small businesses in the city interest-free loans.
The overview
The Targeted Help for Retention, Innovation, Ventures and Expansion, or THRIVE, program is a partnership between the Buda EDC and LiftFund, a San Antonio-based organization.
The partnership allows the Buda EDC to buy down the interest rate on loans to Buda-based businesses, said Jennifer Storm, Buda EDC chief executive officer. LiftFund—a nonprofit financial lender for small businesses—is then responsible for processing applications and ensuring all payments are processed.
The THRIVE program provides a financial buffer to small businesses in the city for when they experience periods of decreased revenue, Storm said. The funding will allow businesses to pay essential operational costs, such as rent or salaries, without worrying about the interest on a loan.
How it works
The Buda EDC approved an investment of $100,000 to buy down loan interests and $5,000 for set-up costs at a Dec. 8 meeting. The organization’s fund reserve will finance the program, according to agenda documents.
LiftFund will provide up to $400,000 in loan volume to Buda businesses participating in the THRIVE program.
Businesses must operate or relocate within the city of Buda to qualify for the program. They must be ineligible for traditional lending, meet credit and registration requirements, prove ability to repay the loan and not operate in prohibited industries, according to agenda documents.
Examples of prohibited business include:
- Gambling
- Adult entertainment
- Marijuana companies
THRIVE funds may be used for working capital, such as equipment, furniture, fixtures and inventory. The funds may be put toward commercial real estate, under limited criteria and refinancing predatory or high-cost debt, according to agenda documents.
Looking ahead
LiftFund will hold an information session for local businesses to learn more about the program and the application process. Applications for the program will be available on the Buda EDC website following its official launch.
The program will become available following the signing of a legal agreement between the Buda EDC and LiftFund.
“I'm excited that we're able to listen to the needs of our businesses and find solutions,” Storm said. “The most important thing for us is to listen to what they're actually asking for and then provide those solutions.”
