Mineral Wells launches $1M small business development loan program at 1% interest

In a recent City Council meeting held on July 1, 2025, the Mineral Wells City Council discussed a significant initiative aimed at bolstering local economic development through a proposed small business lending program. The council is considering securing a $1 million loan at a low interest rate of 1%, which would be repaid over a 30-year period. This funding is intended to support small businesses and entrepreneurs in the community, providing them with much-needed financial resources to grow and thrive.

David Miller, a key figure in the initiative, explained that the program is designed to fill gaps in financing that traditional banks may not cover. The city plans to lend the borrowed funds to local businesses at competitive rates, potentially lower than those offered by banks. For instance, if a business faces an 11% interest rate for equipment financing, the city could offer a rate of 5% or 6%, making it easier for businesses to invest in necessary tools and equipment.

The council emphasized that this lending program is modeled after successful federal initiatives, particularly those from the Economic Development Administration (EDA). While the city will act as a "lender of last resort," it aims to provide support to businesses that may struggle to secure financing through conventional means. The program will be flexible, allowing the council to set interest rates on a case-by-case basis, depending on the specific circumstances and risks associated with each loan.

In terms of risk management, the council discussed measures to protect the city’s investment. Loans will typically require collateral, such as inventory or machinery, and will be personally guaranteed by the borrowers. This approach aims to minimize the risk of default, which has been a concern in similar programs in other communities.

The council also noted that the USDA has identified this funding opportunity as underutilized in the region, suggesting that there is significant potential for economic impact. The city plans to move forward with the application process for the loan, with the expectation that it will lead to the approval of several small business loans in the near future.

Overall, the discussions at the meeting highlighted the city’s proactive approach to economic development and its commitment to supporting local businesses. As the council prepares to implement this program, it anticipates that it will not only stimulate economic growth but also enhance the overall vitality of the Mineral Wells community.