The Milwaukee Economic Development Corporation received $4.3 million in federal money to create two new revolving loan funds.
The U.S. Economic Development Administration recently awarded MEDC a $2.8 million grant through the CARES Act to provide financial assistance to businesses heavily impacted by COVID-19. The funds will be deployed through a revolving loan fund to businesses in the city of Milwaukee.
The EDA also awarded MEDC a $1.5 million grant, which MEDC will match to produce a separate $3 million revolving loan fund that will target businesses in the city, said David Latona, MEDC president.
The $1.5 million EDA grant is expected to create or help retain 255 jobs and generate $4.5 million in private investment, according to an EDA press release. These funds could be used to provide loans to businesses in opportunity zones or low-income neighborhoods, but it’s not a requirement for the fund, Latona said.
When asked where the funds could be deployed, Latona said MEDC is open to funding projects in multiple areas and identified several parts of the city including along Martin Luther King Drive, West Wisconsin Avenue, the former Northridge Mall area and parts of the southside.
Latona also said MEDC would be open to lending to a business in Century City and referenced Franklin-based Strauss Brands, LLC, which had planned to move to Century City until the meat processing company met stiff opposition from some neighborhood residents, interest groups and some aldermen.
“From our standpoint, we’re certainly open to some of the opportunity zone areas like Century City, we’d love to put some of this money into a business over there if we can find one that’s willing to go there and doesn’t get turned down by the alderman I guess, i.e. Strauss,” Latona said.
In addition to these two new revolving loan funds, MEDC has a third RLF that was established in 1985, which MEDC has grown from $600,000 to approximately $3 million, Latona said.
MEDC’s RLF program from 1985 has an interest rate of 5.25%. However, the interest rate for the new loan funds will vary and could be as low as 3.25%.
“It really depends on the project and what they need,” Latona said. “But the whole point of it is to try and lend it out at as low of a rate as possible and for us that usually is about 3.25%.”
MEDC provides $400,000 to $500,000 loans on average to businesses.
Since MEDC was established in 1971, the organization has lent over $405 million to more than 1,300 business for a total project investment of $1.8 billion. The size of its loan fund its approximately 90 million, which includes $100 million in outstanding loans to about 230 customers.