A new community group is raising capital “creatively” to help grow local businesses.

The Bowdoinham Community Development Initiative originated from talks in 2011 about how to make the town of fewer than 3,000 residents “an even better place to live, with all of the assets it has,” said David Whittlesey, one of the group’s five board members.

That conversation led to “a real focus on farms and food, but also the music and arts and businesses that support them,” he said.

The idea then developed into an entity that could provide capital to meet local business needs.

Incorporated June 15, 2012, the Bowdoinham Community Development Initiative “stimulates, grows and sustains healthy local enterprises, creates resilient local jobs, and facilitates collaboration among the for-profit, nonprofit and government sectors in the local community.”

The group connects businesses proposals with local investors who can make cash available.

Initial conversations marking the birth of the initiative grew out of concerns about economic sustainability, oil prices and the exodus of a longtime credit union from town, Whittlesey said.

“Part of the whole idea also came out of the economic situation where interest rates are terribly low,” he said. Many people “would rather have their investment be in a neighbor in town,” keeping the money local along with the resulting potential for development, Whittlesey said.

The group’s screening committee assesses loan applications and makes recommendations to the board.

If approved, a loan of $500 to $15,000 is to be repaid within 12 months, with a maximum of 24 months.

So far, the Bowdoinham Community Development Initiative has made three loans totaling $19,000, with another in the pipeline.

Whittlesey said loans are structured “creatively.”

The Initiative’s first loan was for a tractor for Small Wonder Organics, an organic vegetable farm.

The farm borrowed $7,000 at 3 percent, with 2 percent returned to the investor and 1 percent paid in the form of plant seedlings given to the Bowdoinham Public Library.

Small Wonder Organics owners Sarah Trask and Pete Engler said Tuesday that when they started the farm in 2010, it was a small venture that grew little in the first two years.

They borrowed equipment and made do with what was available to them, but at the end of the first two years, “we realized we really needed our own tractor,” Trask said.

Not big fans of traditional bank loans, Trask said they found the Initiative offered local people who could invest, but who also had expertise to draft a legal document for the loan that could be replicated.

“I was so amazed with how quickly people (who wanted to invest) responded in Bowdoinham,” Trask said.

Only a couple of weeks after applying, they had the check in hand. When they paid investors back, many had the Initiative reinvest that money in a loan fund.

The Initiative — which is waiting for nonprofit status from the IRS — is not affiliated with the municipality, but works in collaboration with the town’s economic and community development committee, Whittlesey said.

More investors have volunteered than have yet been needed, he said, though demand outside the farming community has been slower than anticipated.

The group is looking to leverage local assets in sustainable farming, including processing, marketing and distribution.

“I think the BCDI has very much been looking at how does that happen at the very local level, and the implications of that for the Mid-coast region and more broadly, for the state,” Whittlesey said.

With a tiered-fee membership of more than 40 members, Whittlesey said board members will be elected in the future by BCDI members, and screening committee members will be drawn from the membership.

Currently serving on the board with Whittlesey are Tony Cox, Laurel Waterman- Lopez, George Christopher and Kathy Gallant. Gallant also serves on the Bowdoinham Board of Selectmen.

For more information, visit www.bcdi.us.

dmoore@timesrecord.com