PORTLAND – After 20 years in existence, the Downtown Portland Corp. is changing its name — and revamping the way it does business.
Board members said the Downtown Portland moniker implies the organization makes loans only to downtown businesses. In reality, the organization aids companies all across the city, they said.
The organization is leaning heavily toward changing the name to the Portland Economic Development Corp.
“People think we’re only focused on the downtown because of our name, and that’s just not true,” said Sam Spencer, the board’s president.
The city created Downtown Portland in 1991 to provide loans and other financial assistance to businesses throughout the city. The City Council appoints the 11 board members, including personnel from the city’s Economic Development Department.
Downtown Portland currently has 19 outstanding loans to city businesses totaling $1.1 million. Those loans helped leverage $11.3 million in private investment — a 10-to-1 public-to-private ratio according to city figures, which Greg Mitchell, the city’s economic development director, called “a very good ratio.”
In addition to the name change, the board on Sept. 29, will likely approve eight to 10 policy and procedural changes to help streamline the organization’s loan program, allow companies to refinance for the first time ever, and — it hopes — better market the availability of the programs.
The allowance of refinancing will help in this tough economy, board members said. But to get refinancing, a business will need to meet certain conditions.
Those include: being current on all debt payments over the previous 12 months; using a portion of any savings for expansion; and not using credit cards that have been issued for personal purposes.
Board members said the limits show that they don’t want to let businesses refinance just to keep sinking ships afloat.
“I don’t think this is opening the door wide for refinancing,” said Vin DiCara, a loan consultant for the city. “There are a lot of conditions here that need to be met.”
Downtown Portland has more than six loan programs, some of which specifically focus on microbusinesses, creative economy businesses, environmental remediation and real estate.
Other proposed changes include increasing the maximum microbusiness loan from $25,000 to $50,000, no longer requiring a bank rejection letter to qualify for loans and establishing a 60/30/10 guideline. That means a bank should provide 60 percent of the loan for a project, Downtown Portland should provide 30 percent, and the applicant should provide at least 10 percent.
Those guidelines are flexible, but they’re a good written goal to establish prudent business practices, said Jack Lufkin, a board member and former city economic development director.
In terms of requiring a rejected bank note, that policy has deterred some people from even applying for loans because some small-business owners are intimidated by banks, board members said. Also, a rejected loan request has a negative effect on credit scores.
The board appeared to unanimously favor of all the changes. Board members left open the possibility, however, that someone could come up with a better name for the organization in the next two weeks, if people didn’t care for the name Portland Economic Development Corp.
The board hopes a new name will attract more applicants: Downtown Portland has almost $2.3 million available to loan out, and it would like to increase its number of loans.
Staff Writer Jason Singer can be contacted at 791-6437 or at:
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