County Revolving Loan Fund discussed

DAVE MOSIER/independent editor

The decision to switch the county’s microenterprise loan program to a Revolving Loan Fund was a topic of discussion at this week’s meeting of the Van Wert County Regional Planning Commission. The county’s new Phoenix Initiative was also discussed.

Recently, County Commissioners Todd Wolfrum, Thad Lichtensteiger and Stan Owens made the decision to convert the microenterprise loans into a county Revolving Loan Fund. The changeover gives the county two RLF programs, with the other developed within the city back in the 1990s that has provided more than $3 million in loans and created more than 200 jobs. Since 2002, the microenterprise loan program has made $500,000 in loans and created approximately 36 jobs. The county’s loan programs together total approximately $3.5 million in loans and 250 jobs created.

Compared to Mercer County’s RLF program, though, local business loan programs aren’t doing all that well, which Commissioner Todd Wolfrum said signaled the need for change.

“Comparing these numbers to counties like Mercer, whose RLF alone reports nearly $12.5 million loaned to date, over 1,600 jobs created, plus a monthly revenue of approximately $35,000, it was time to make a change,” Wolfrum said.

Switching the Microenterprise Loan Program to an RLF program was also a no-brainer, the commissioners said.

Since April 2002, the Microenterprise Loan Fund has awarded 34 loans totaling $504,870. Five loans are currently on the books, with a balance of $95,016.27 loaned out currently. However, of the 34 loans made, 11 were discharged for bad debt – a total of more than $85,000 – and three others are in default, while one other loan is delinquent, but paying on the principal of the loan.

The same number of loans, 15, have been successfully paid off and closed, according to loan totals compiled June 30.

While both counties have about the same number of dollars available for new loans — $211,000 in Van Wert County and $240,000 in Mercer County – Mercer also has pending loan requests totaling at least $250,000.

The high number of discharged and defaulted loans comes from the fact that loan recipients are often high-risk business start-ups that often can’t get loans from traditional sources, such as banks and other financial institutions.

Noting that they feel the program has not been a good use of taxpayer dollars, the commissioners feel the move to a county RLF program will allow for better use of the fund for economic development purposes, including as leveraged dollars for community projects within the county.

“It is the aim of the county to aggressively use the county RLF to better serve Van Wert County residents and their needs,” Wolfrum said.

Also discussed during the Planning Commission meeting was a new program begun by the county to tear down dilapidated houses in the county. The program, called the Phoenix Initiative for the mythological bird that dies and is resurrected, is intended to reclaim properties for development by demolishing existing dilapidated structures located on them.

The commissioners say they have allotted a minimum of $25,000 to the program for Fiscal Year 2014, with more dollars possible if the county budget allows for it.