The city will provide a 50% guarantee to banks that make loans to Austin music businesses. The idea is to encourage banks to make more loans to music-related businesses to establish music as a major segment of the city's economy.
The city, whose official motto is "Live Music Capital of the World," has allocated $225,000 for the program. In tandem with local banks, the program is expected to create a pool of $550,000 for new loans.
Eligible businesses include instrument stores, repair shops, music clubs and bands. Preference will be given to businesses that have shown a profit during their operation.
Borrowers can use the money to make improvements to existing buildings and to pay for related fees. They also can use it for instruments, furniture, fixtures and equipment and for working capital. They cannot use it to buy property, for copyright-related items or to refinance other loans. The program is operated through the city's department of telecommunications and regulatory affairs.
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