This story was updated Feb. 18, 2019, at 5:48 p.m. with more information.
A proposed new loan initiative aimed at bolstering existing small businesses and neighborhoods was rolled out Monday by Chattanooga Mayor Andy Berke.
The Neighborhood Reinvestment Fund is slated to use $500,000 in city money to help small businesses with so-called "hard" costs, such as facility renovations, equipment and inventory acquisition and even website development and marketing.
Loans will require matching funds from the business in these amounts:
› $500 to $5,000 loan: 12 percent match
› Above $5,000 to $15,000: 18 percent
› Above $15,000 to $25,000: 25 percent
Source: City of Chattanooga
In the first year, Berke said he expects more than 10 companies to take advantage of the effort that could provide individual businesses with loans of up to $25,000.
The mayor unveiled the program at Moss' Place II, a catering business on Tunnel Boulevard, where the company's owner said he plans to apply for a loan to replace the roofs on adjacent buildings.
Businessman Darnell Moss said that when he started his catering company 19 years ago, he never thought he'd see the success he has today.
"There are other things I want to do," he said, adding that "there are some people here, I'd like to help them out also."
Businesses would be expected to match a percent of the loan amount, Berke said, depending on how much is borrowed.
"Local businesses need some skin in the game, too," the mayor said, noting that companies can couple the loan with other funds as well.
In addition, he said, participants will work with small business coaches such as those at SCORE, the Company Lab and the Tennessee Small Business Development Center.
"We have a lot of small business counseling that can really help," Berke said.
Patricia Wente, the SCORE chapter chairwoman, said its coaches will go through the company's business plan. She said the mentoring group will sign off on that part of a company's efforts.
The mayor said the program "adds one more tool to help our local businesses."
"He wants to invest in this area," Berke said of Moss. "We're at Tunnel and Shallowford [Road]. This is where the city wants to see investment. It helps the neighborhood. It helps this commercial corridor."
He said that when he first ran for the mayor's office, he heard from small business people across the city that there weren't enough incentives and help from city government.
"What they heard about was the large-scale industrial recruitment," Berke said, adding that the city values that investment.
But, he said, the city needed to find different ways to help local businesses.
Helping businesses aids the neighborhood's commercial corridors, where people can walk and bike to work, Berke said.
"It will grow not just that business but the area around it," the mayor said.
He said the program "isn't a life saver. This is about investing in a proven business that has a business plan."
Berke said there are a number of interested companies — about 10 to 12 so far — and the effort is expected to go before the city council soon.
Contact staff writer Mike Pare at firstname.lastname@example.org or 423-757-6318. Follow him on Twitter @MikePareTFP.