Town officials hope a new low-interest loan program will help Main Street businesses impacted by the economic downturn and by downtown construction.

A program of the town's Community and Economic Development Authority (CEDA), the small business loan program will offer loans ranging from $5,000 to $10,000 with simple interest in the range of 3 to 5 percent and term limits of 3 to 10 years, according to CEDA Director Salvador Pina.

Only businesses in Wareham Village -- which roughly ranges along Main Street from Zecco Marine on the corner of Main Street and Warr Avenue to the Old Company Store on Elm Street -- are eligible to apply for the loans, Pina said.

The loan program is being offered in light of the first phase of the downtown "Streetscape" project, which is slated to be completed in early July. The grant-funded, $900,000 construction project has been overhauling Main Street from Center Street to the Post Office with wider sidewalks, the installation of "bump-outs," or bulges of curbing into the street, and the addition of benches and new lighting. That section of Main Street and the Pezzoli Square parking lot have also been paved.

The aim of the project is to make downtown more pedestrian friendly, Pina said.

"We understand that we are in a very difficult economic environment. ... We also understand that as we revitalize downtown … that these [changes] have impacted the businesses," said Pina. "We want to help people with this loan pool."

However, business owners who say they have been negatively impacted by the Streetscape project feel that the loan program is too little, too late.

Gina West, owner of Tropical Tan, a tanning salon at 191 Main Street, said that her business is a seasonal business that peaks during the pre-summer months between February and July.

This year, major construction on the Streetscape project coincided with that busy season.

"My business went from 80 people a day to not even 30 people a day," West said, adding that she estimates her loss at between $6,000 to $8,000 dollars. "Come fall and winter time, I'll be lucky to make it through it."

West did not feel that the loan program, even with its low rates, could make up for her loss.

"You're going to give me a discount on it, but I'm still spending money to get money, which I would not have had to do had they not even started [the Streetscape project] in the first place," West said.

Mario Savoia, owner of Wareham Barber Shop at 249 Main Street, also said he lost business due to the project. He did not believe that the loan program was something he would use.

"The last thing I would do is take out a loan and hope things get better," said Savoia. "Are things going to get better in the near future or going to get worse? I don't know the answer to that, so how can I justify getting a loan?"

Pina said that the loan program was not intended to compensate businesses for their losses, but rather was intended to help businesses going through rough times.

"What we're trying to do, we're trying to provide a low-cost way for businesses to get working capital," Pina said. "It's a business decision. If businesses want to use it, they can."

Pina continued: "It's not the answer for every business ... but it's a resource, and it's one of the things that needs to be in place to help our businesses sustain themselves and be successful."

Jean Connaughton, chair of the CEDA Board, agreed.

"We really think this is an opportunity to provide support to these downtown businesses with the small-interest loans," Connaughton said. "It's part of the goal of revitalizing downtown -- it's not something you do overnight."

The loans are not just for businesses that have been hurt by the downtown construction, however.

The loans can be used for start-up businesses in Wareham Village that are just getting on their feet, for "business stabilization" for a seasonal business that may need a loan to get through the off-season, or for business expansion, perhaps for a business that would like to purchase equipment that will increase profit in the long run, Pina explained.

The CEDA Board is asking that businesses try to get loans from banks before using their loan program, however. "We're not trying to compete with banks," said Pina.

But if owners don't get a loan from a bank, CEDA is hoping that those businesses will take advantage of its loan program, even if a bank may have determined their business to be a high-risk investment.

"We have a different motive [than banks]," said Pina. "The motive of the CEDA Board is: 'I want businesses staying downtown. We might take more risk … because we want to make sure businesses stay downtown, because it creates jobs. We don't want more vacant storefronts."

Pina said that he envisioned businesses using the loans for activities such as improvements to their storefronts, purchasing equipment, and staff training.

Businesses have to meet certain conditions to obtain a loan. For example, if owners plan to use a loan to expand their business, they have to show that they have created a certain number of jobs.

The funding for the loan program comes from a 2007 development agreement between the town and WS Development, the developer of Wareham Crossing.

According to the agreement, WS Development would give the town a total of $300,000 over a period of five years.

Of that total, $50,000 was earmarked for "downtown revitalization" and has been was used for the loan program.

The total $300,000 was allocated to various causes, including community events, police, and housing, according to the agreement.

Pina said that though CEDA is charging low interest rates, he expects that the initial loan pool of $50,000 dollars would continue to grow as loans are paid back with interest.

"It's seed money for a loan pool," said Pina. Over time, "the pool will grow bigger."

Pina is also looking for other sources of funding to expand the loan pooeal.

Though loans have been envisioned as running between $5,000 and $10,000, amounts can vary beyond that depending on the purpose of the loan, Pina said.

Wareham Village business owners interested in the program can visit the CEDA office in Town Hall and fill out an application. Businesses can also call the CEDA office at 508-291-3100, extension 3173, or e-mail CEDA Director Salvador Pina at spina@wareham.ma.us.

Connaughton was hopeful that the program would be successful.

"I hope that [businesses] will take advantage of it, and it will be worthwhile," She said. "We think it will be."