The county commissioners approved the updates to the program last week, at the recommendation of Community Development Commission Executive Director Nathan Origer. “We’ve changed the process just a little bit, so that every loan goes through the CDC as an intermediate step,” he explained. “It used to be that on the small loans, our committee would get together of a couple of bankers, a couple elected officials, and go straight to the commissioners. And this way, in all cases, we’re not just looking at the finances, but the CDC is saying, ‘Yes, we think this kind of fits our mission and our vision for what we want to do in the community,’ and then go to the commissioners.”
The CDC has been working on the updates, after a loan request from Winamac restaurant Tippy’s was delayed over concerns about the security of the loan. Origer said the new guidelines set clear rules, when it comes to collateral. “In the past, it just said that collateral will be required, and we ended up, sometimes, like we did with this and a couple of recent loans, sort of going back and forth, figuring out, making sure we have set collateral, where it’s got to be 75 percent of the loan for the smaller ones where there is little to no real property and then 100 percent when real property is involved.” To determine those amounts, appraisals will now be required before the CDC will consider a loan request.
Origer added that the update also removes the option of transferring loans. “Now, it will always be if I am a borrower and, for whatever reason, I want to get out and I want to sell my business, I have to pay off the loan,” he explained. “If the new buyer wants to apply separately, he or she is welcome to, but we’re not going to allow a transfer of a loan. And that way, we don’t get into any ugly situations where it looks good on paper and then we find out we get snookered.”
The updated guidelines for the Pulaski County Revolving Loan Fund were approved by the CDC and County Attorney Kevin Tankersley, before getting the commissioners’ approval last week.