Five Dubuque banks are joining forces to create a $2.5 million loan pool to help spur development downtown.

The Dubuque Main Street Loan Pool program will offer fixed-interest loans to help developers launch eligible commercial projects, according to a press release. Projects must “complement Dubuque Main Street’s vision of a revitalized downtown.”

The loan program will focus on the Central Avenue corridor, according to Tori Richter, an American Trust & Savings Bank senior vice president and Dubuque Main Street board member.

“There’s got to be some improvements made to the properties,” she said. “We’re looking at properties that need a little help. We’re trying to help the properties that need help by giving them better incentives, better rates than they can get on the open market. And a little bit better terms.”

U.S. Bank, Premier Bank, Fidelity Bank, Dubuque Bank & Trust and American Trust each contributed $500,000 to the pool. Loan disbursements will range from $100,000 to $250,000 and will be paid back over five years.

Projects must occur within a Dubuque Main Street historic service district, which extends from Railroad Avenue/South Locust Street to 22nd Street between Bluff Street and the Port of Dubuque. Money can be used for property acquisition or rehabilitation efforts.

The application process is open now, and loans must close by Dec. 31. Applicants will be subject to normal commercial credit and collateral requirements.

The loan pool is a reinvention of a previous program that contributed more than $13 million that helped fuel more than $50 million in downtown renovation projects, according to the release.

This year’s effort is unique in that developers can spend the first two years of the loan period paying off only interest. By deferring principal payments, the plan will allow them to take additional time to get projects up and running, Richter said.

“We’re trying to give people a little bit of time to develop their plans and develop their source of capital for very hard-to-move buildings in the Central corridor,” she said.

Chad Wagener, vice president of commercial lending for Premier Bank and a Dubuque Main Street board member, said local financial institutions view any economic development as a “good thing.”

“This program can be taken advantage of by the mom-and-pop-type businesses that are out there, the developer that doesn’t do large-scale projects,” Wagner said.

Anyone interested in the loan program can call Dan LoBianco, Dubuque Main Street’s executive director, at 563-588-4400 or a commercial loan officer at any of the participating banks.

“We’ve got probably at least 20 vacant storefronts up on Central between 14th and 22nd (streets),” said LoBianco. “Any development projects in those buildings could be appropriate.”

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