Springfield micro-lending fund gives $120K in 1st 2 months

SPRINGFIELD, Ill. (AP) - The city of Springfield's new micro-lending program has given out a total of $120,000 in loans to small business owners and entrepreneurs in its first two months.

The program started in mid-September, the (Springfield) State Journal-Register (http://bit.ly/1Oh4tsq ) reported. According to the city, about 40 people have applied for loans, and 22 have been approved.

"We continue to get numerous calls every day," said Karen Davis, Springfield's director of planning and economic development.

Money from the loans has been used by startups, as well as by existing businesses that needed extra capital to make upgrades. One loan was given to Magalene Daniels, who put it toward a new floor and refrigerator and cooler as she transformed a former bar into Ms. D's Kitchen, Bar and Grill. It opened Nov. 2.

"I didn't receive that much, but what I did receive, I was thankful for," Daniels said. "It was helpful."

The maximum possible loan is $50,000, and payback periods range from one to five years. Interest rates vary from 8.5 percent to 14 percent, said Danielle Pitts, a small-business counselor with community lending group Justine Petersen. The St. Louis-based group is working with the city of Springfield on the program.

The fund began with $1.7 million worth of startup capital fronted by banks, with $25,000 coming from Springfield's Community Development Block Grant funds. Davis said other banks have since gotten involved.

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Information from: The State Journal-Register, http://www.sj-r.com