The city of St. Paul is putting up a half-million dollars to offer low-interest loans to businesses in the city’s most poverty-stricken neighborhoods, with the possibility that up to half of the money wouldn’t have to be paid back.

The fund, offered through the city’s Planning and Economic Development Department, offers businesses $10,000 per full-time job created, up to a maximum of $100,000, provided the businesses are in areas of concentrated poverty.

Those areas include most neighborhoods on the East Side, North End and West Side, plus Frogtown and portions of the Summit-University neighborhood.

By definition, they are areas where at least 40 percent of residents make 185 percent or less of the federal poverty level, and at least 50 percent are people of color.

Under the city’s program, up to 30 percent of the loans’ initial capital would be forgiven when jobs are created — and another 20 percent if new hires come from the targeted neighborhoods. In order to get the maximum percentage back, the jobs have to be in place for five years.

Additionally, the businesses that apply must match the loans with 30 percent of their own equity, or twice that if they’re a start-up.

The funds could be used for a wide variety of things, from building improvements to inventory to working capital.

The city’s Housing and Redevelopment Authority must approve loans above $50,000; those larger loans must also comply with the city’s affirmative action policies.

The money for the fund is a line item in the HRA’s 2018 budget as a one-time pilot program. This is the first time the city has done a fund of this nature.