Kent County government could be getting rid of its revolving loan fund.
The fund provides loans to businesses that have been rejected by banks. The long term low interest rate loans can be used for real estate purchases, start up, working capital or fixed asset acquisition. The initial funds to set up the program came from a federal development block grant.
“It’s really a program of last resort,” said Jack Steinmetz, director of Economic Development.
To help with the transition of the Economic Development Office to other departments in the county, Steinmetz wants to kill the program.
“There’s a great deal of work that goes into processing one of these loans,” he told the commissioners at their Tuesday meeting. “The time we spend on it and the value obtained from it, and I say this as a retired lender, isn’t worth it.”
According to Steinmetz, there have only been six loans awarded in the program’s nine year history. He wants to suggest to the state that the county returns the $456,000 left in the revolving loan fund, but keep the $145,000 in outstanding loans.
“It means that we will not have a loan program to offer businesses coming in, but in my opinion it will not prevent us from getting businesses in the county,” he said.
Commissioner William Pickrum disagreed. “Why should we get rid of the program if it helps businesses? It’s a way of fostering some of our own people and its still being invested in by the state. We’re here to grow businesses, grow jobs, and help people move ahead and I think we should keep it.”
County Administrator Susanne Hayman pointed out that while it may not cost the county anything to maintain the program it is paper work heavy.
“When a small loan defaulted there was a considerable amount of time spent by Jack and Augustine (Cook, administrative aide) calling the debtor, going to their house, working out a payment plan … it was a number of years before it finally made it to the courts for judgment,” she said. “In the sense, it puts the county in the banking business because you have to monitor the loan.”
Commissioner Ron Fithian said even if that is the case, “the fact that it doesn’t cost us anything means we can defer the decision” until Steinmetz has his final transition report in place.
Write a Letter to the Editor on this Article
We encourage readers to offer their point of view on this article by submitting the following form. Editing is sometimes necessary and is done at the discretion of the editorial staff.