Downtown retailers and loan-hungry merchants who are considering downtown locations will gain a source of capital under a privately financed program announced yesterday by the Downtown Partnership of Baltimore.
Maryland National Bank and Mercantile Bankshares have contributed $100,000 each toward the loan fund, and more pledges are expected from other banks, said Alan Hochman, director of business development for the quasi-public development group.
The loans will be backed by $125,000 provided by the Abell Foundation and $50,000 from Baltimore Gas and Electric Co. The $175,000 collateral fund could back $350,000 in loans the first year, Mr. Hochman said.
Laurie Schwartz, Downtown Partnership's president, said the program is designed to fill "a gap in the marketplace" that makes it difficult for downtown retailers to get loans. An estimated 10 to 12 retailers would receive loans, typically $25,000 to $30,000, the first year, she said.
"We think it can make a dramatic impact," she said.
Mr. Hochman said the loans would be available to three classes of borrowers:
* Downtown retailers who want to renovate or add a downtown location.
* Merchants outside downtown Baltimore that want to open a downtown location.
* Downtown stores that need extra financing to increase inventory for seasonal sales.
Ms. Schwartz said borrowers would be selected based on creditworthiness and how their projects would contribute to the "mix" of downtown retailing.
Any business south of Mount Royal Avenue, north of the Inner Harbor, west of the Jones Falls Expressway and east of Martin Luther King Boulevard is eligible, but Ms. Schwartz said the loans will focus on the "core" business district.
She said program participants had expressed interest in continuing the program if it proved successful in its first year.
Information is available from Mr. Hochman at 244-1030.
Alex. Brown & Sons and the law firm Piper & Marbury provided free help in setting up the program, Downtown Partnership said. Miles & Stockbridge has pledged to do legal work on the loans free of charge.