Small Business Loan Program

downtown business

Financial Assistance for Small Businesses is available through a small business loan fund if your for-profit business is located in the Winston-Salem Neighborhood Revitalization Strategy Area NRSA Map [pdf/1p].   For example, the owners of Sweet Potatoes A Restaurant received a Small Business Loan from the city to help get them established. 

Your business must help create or retain jobs that benefit low-to moderate-income individuals. These funds are available to businesses unable to secure financing from conventional lending sources. The program is designed as a matching program to complement investor equity and bank financing. Our average loan is $35,000. This is a loan program and grant funds are not available. 

The Business Development Division and a seven-member citizen loan review committee appointed by the City Council are responsible for administration of the loan fund. The loan committee consists of individuals representing banking, legal, small and general businesses, community and economic development interests.


  • Small businesses located in the Neighborhood Revitalization Strategy Area (NRSA map [pdf/1p]). 
  • The business' net worth cannot exceed $6 million and net profit after taxes must average less than $2 million during the previous two years.
  • You must be willing to contract for free management and technical assistance if determined to be necessary by the loan committee.
  • You must be a citizen or legal resident to apply.

Use of Loan Funds

A loan for starting a business can be used for:

  • Costs related to business start-up or expansion
  • Renovating, upfitting, or rehabilitating commercial buildings or spaces for business occupation
  • Purchasing furniture, fixtures, and equipment (FF&E) for the business 
  • Buying property for use as commercial space for the  owner
  • Improving energy conservation

For information on the Retail Inventory Loan Program to assist with inventory purchases please use this link.

A loan cannot be used for:

  • Funding for a non-profit organization
  • Purchasing, constructing, or rehabilitating government facilities
  • Schools and educational facilities
  • Facilities used for exhibitions, spectator events, or cultural events
  • Hospitals, nursing homes, or other health care facilities
  • Purchasing equipment for personal use
  • Real estate investment
  • Purchasing, constructing or rehabilitating for housing

Loan Amount/Terms

  • The minimum city loan amount is $5,000.
  • The maximum city loan amount is $100,000.
  • The average loan is $40,000.
  • All loans are subject to availability of funds.

Interest rate and fees

  • Interest rate is prime (currently 3.5%) plus one (1%) based on the published Wall Street Journal Prime Rate at time of approval (5.5%). 
  • The maximum term of the loan is ten (10) years or 120 months of equal installments.  However, shorter terms are more common.

Collateral (property accepted as security for a loan)

All loans are secured through collateral. Preference is 75 percent loan to value ratio ($75 loaned to $100 of collateral); however, loans could be based on loan to value ratio of 100 percent.

  • Acceptable forms of collateral are required and based on commonly-accepted definitions. 
  • The city may be willing to accept a second mortgage position in projects where a private lender is involved.

You will be responsible for obtaining an attorney to assist in securing the city's lien on the collateral.

Loan Repayment

  • The last 25% of a loan may be forgiven if the first 75% is paid in full and the loan  status remained in good standing throughout the original term. (The IRS has determined that any portion of a loan forgiven may be counted as income to the borrower and be subject to income taxes. Please refer to a tax professional to determine your income tax liability for any loan or portion of that is forgiven. )
  • Loan payments are due on the first day of the month. 
  • A late payment will be assessed at 4 percent of the payment amount after the loan becomes 15 days overdue. 
  • If the loan payment becomes 30 days overdue, the city will implement procedures for the collection of delinquent loans. 
  • Loans may be prepaid without penalty.*

     *(Please be advised, pursuant to IRS regulations, the city will issue a 1099 for debt that is forgiven and that it will be up to the recipient of the 1099 to consult with a tax adviser to the determine the tax consequences. The city does not provide tax advice.)

Credit History

person at tablePreference is given to borrowers with a good credit rating; however, the city will consider applicants with credit ratings showing a history of accounts up to 30 days past due. 

Applicants with bankruptcy or repossessions listed on a credit report will, in most cases, be considered too great a credit risk for the program.

Job Creation

  • One (1) job must be created or retained for each $35,000 borrowed.
  • The business must make a good faith effort, within established guidelines, to make at least 51% of the jobs (created or retained) available to low- to moderate-income people.

Submission Process

You should call the Development Office to request an appointment to discuss the loan process. City staff will review with you the guidelines established for the program, your business plan and the supporting items needed for loan processing.  Free assistance in completing the the business plan process is available at: 

  • The Small Business Center, Forsyth Technical Community College, 525 Vine St, Winston-Salem, NC 27101 (336) 757-3810. Please call for information.


Be sure to include the entire package of items to be reviewed. (See items listing at end of document.) Incomplete packages cannot be processed.

Loan package review

Construction workers inside a buildingThe Development Office staff will review your business plan and tax returns, analyze your financial statements and business performance to determine if you have sufficient cash flow to meet the loan's obligations. The staff will then prepare a summary of your loan request and send it along with the full loan package to the members of the Economic Development Revolving Loan Committee. (All Information submitted to the Development Office is public information.) Completed loan packages received two weeks prior to the loan committee's meeting will be placed on the next agenda. The loan committee considers loan requests once a month. (Schedule available through the Development Office.)

Loan approved or denied

The loan committee will make the loan decision based on the information provided. You may be requested to be present during the committee's meeting. The Development Office staff will inform you in writing of the loan committee's decision.
Terms and conditions apply. 

At its discretion, the loan committee may impose additional terms and conditions necessary to strengthen the loan or to secure the city's financial interest.

Distributed funds

Once approved, loan funds are distributed on a reimbursable basis via valid paid receipt.

Appeal of loan denials

You have the right to request an appeal of the loan committee´s decision before the Mayor and the City Council. To do so, you must submit a written request for appeal to the Development Office. The Finance Committee of the Winston-Salem City Council may, at its discretion, formally consider such a request.

Compliance with Regulations

Man looking at blueprints.Loans made from this program must be consistent and in accordance with the Federal Community Development Statutes (24 CFR 570); the N.C. General Statutes dealing with community development (G.S. 160-A-456, 1983 Sessions Laws); and the policies established by the Winston-Salem City Council. 

Construction companies working on projects funded through this program are required to comply with the Davis Bacon Fair Wage Act. Failure of a project to comply with Davis Bacon Fair Wage Act could result in the borrowers default of loan, suspension of loan proceeds, and/or initiate repayment terms ahead of schedule.

Items Required for Loan Processing

All of the following items must be submitted. Incomplete packages will not be considered. 

Preliminary Application obtained from the Development Office. 

Business plan consisting of a narrative explaining:

  • Your company; why it was formed.
  • History and description of industry.  
  • Competition; what makes you different.  
  • Market study and strategy.  

Financial Statements: 
Month-to-month cash flow projections for three (3) years or 36 months.
Projected balance sheet and profit and loss statements for three (3) years.
Justification of line item assumptions; what is the basis for your line item sales figures and your line item expense figures?

Statement of Purpose for the loan proceeds including itemized use of funds.
Written estimates of building renovations, equipment, inventory and purchases must be included if applicable.

Statement of Equity: how much funds will you be putting into the business? 

Other Documents:

  1. Current Financial Statements of business (income statement and balance sheet) for existing businesses. List of start-up costs for new businesses including written  estimates of all estimated purchases. 
  2. Tax Returns for past three (3) years (personal and business). 
  3. Personal Financial Statement for each owner owning at least 20% interest. 
  4. Personal Credit Report for each responsible owner with at least 20% interest.  Two people looking at business plans.
  5. Resumes of owner/operators and other key people. 
  6. List of Current Obligations (business and personal). 
  7. Business References 
  8. Collateral offered to secure loan. 
  9. Documentation indicating you attempted to obtain funds from a financial institution. 
  10. Documentation of Jobs Created: List, by job title, of jobs to be created or retained and indicate jobs which will be made available to low to moderate income persons, whether a job is full-time or part-time; and which jobs require special skills or education. 

Description of actions to be taken by the loan applicant which ensures low to moderate income persons receive first consideration for the designated jobs. A description of the hiring process must be provided. Retained jobs must be made available to low to moderate income persons within two (2) years through turnover. 

If your loan request is approved, you may be required to register with the Workforce Development Department of the Piedmont Triad Regional Council to identify qualified job candidates.  They may be contacted at 336-904-0300 or at the PTRC website.

For more information, please contact Steven Harrison, Economic Development Specialist, at 336-747-7474 or go to the Small Business Liaison Contact Page.

Notify me of page changes

Receive E-Mail Notification When New Information is Posted on this Page
As a member, enjoy the benefits of MyCityofWS, including your choice of newsletters, and notifications about events and site updates. Login and Manage Your Subscriptions Now.