GARDINER — Business owners in Gardiner have a new resource to tide them over in hard times, thanks to a revolving line of credit program that was launched recently.

“On the Economic Development Committee, we’re always looking at opportunities to bring new businesses to town that fit in with our niche,” said Sue Crawford, committee chairwoman. “But we also want to make sure the businesses we have stay healthy.”

A new revolving line of credit program is available to Gardiner businesses, such as the ones shown here Tuesday, to help them during slow periods. Staff photo by Joe Phelan

This Tuesday photo shows Water Street in downtown Gardiner, where the city has launched a program to grant revolving lines of credit to businesses to help them when business is slow. Staff photo by Joe Phelan

This program replaces the city’s revolving loan program that elected officials pulled the plug on a little more than a year ago. Since 2003, the USDA-funded program had made a number of successful loans to Gardiner businesses that otherwise were not able to secure traditional bank financing, which made the loans fairly risky. While many were repaid with no problem, city officials wrote off parts of four loans, totaling $110,000, including $5,000 of the $40,000 loan to Alex Parker’s Steakhouse, which closed in 2014 and whose owner filed for bankruptcy protection.

With the cash remaining from the loan program, the Gardiner City Council signed off on a plan in November to create a revolving line of credit program designed to stabilize cash flow for seasonal businesses,

“We’re trying to bridge the gap of cash flow,” said Patrick Wright, executive director of Gardiner Main Street and the city’s economic development coordinator. “It’s the primary need of businesses to survive and weather changes and grow.”

Business owners can apply for credit lines ranging from $5,000 to $15,000 and would pay interest at the prime rate plus 2 percent; the interest rate would be adjusted annually. The line of credit would be approved by the Economic Development Committee, subject to a personal credit check, and it would be secured by inventory, for instance.

“We’re not looking for an ownership stake,” Wright said.

“People love the whole concept of a 200- to 300-employee business coming to Gardiner and helping the tax base,” Crawford said. “The reality is that we’re a small community, made up of small businesses, and they have brought us here to where we are now.”

While the committee has envisioned a number of circumstances under which this funding could be awarded, Crawford said she most often thinks of the program as a helping hand to get business owners through a difficult time — perhaps winter, when heating costs are high and sales could be slow.

“For me,” she said, “that’s the gist of it.”

Wright said the line of credit could be used by a business that needs to order inventory to meet future sales.

“The owner could apply for the line of credit in January and use it in May,” he said. And as that inventory sells, the owner can pay back the line of credit.

In some instances, he said, a startup company in the hands of an experienced business person and strong business plan might also be considered.

“Getting money in use is the goal,” Wright said. Because limited money is available, business owners who secure approval under the program would be subject to a penalty if they don’t use the credit in a timely fashion.

Committee member Nate Cotnoir, a commercial banking officer and vice president at Camden National Bank, said he’s not aware of any other municipality that’s offering renewable access to credit like this program.

“I’m pretty excited to see it get kicked off,” Cotnoir said. “It fills the need in the marketplace as far as being a part of the package that a good, well-thought-out economic development program has in its arsenal.”

Jessica Lowell — 621-5632

jlowell@centralmaine.com

Twitter: @JLowellKJ

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