By Greg Bird
The McCreary County Economic Development Advisory Board met for the first time in more than two years Tuesday to review four potential applications for loans through the County’s revolving loan program.
The Board, comprised of Judge Executive Doug Stephens, Magistrate O.L. Perry, Greg Burdine, Gordon Kidd, Jim Cmolik, Sharon Mason, and Kay Morrow (who was unable to attend) reviewed the applications and will present their recommendations to the Fiscal Court on which loans, if any, they deem feasible to accept.
The Board does not have the authority to approve any loan, and only acts in an advisory capacity to review the applications. It is expected that the loans the Board consider worthy will be presented to the Fiscal Court at a later date for approval.
The purpose of the revolving loan program was to be able to provide low-interest loans to new and existing local businesses as a means to help encourage economic growth.
The program had ran in to difficulties in recent years, with many businesses defaulting on their loans, and a failure to properly administer the program in the past had left many of the loans uncollected.
After placing a hold on issuing new loans two years ago to allow the program to be re-tooled, the Fiscal Court passed new regulations this past July on any new loans issued; capping the maximum loan at $15,000 with a 3 percent interest rate on an 8-year term. The loans must also be fully secured with the Fiscal Court listed as the primary lien holder.
The applications reviewed Tuesday mark the first loans to be considered under the new regulations.
In July Judge Stephens stated there is about $122,000 in the revolving loan fund available for loans. Of previous loans, the Judge said there are about six to eight loans still active and are current on their payments.
In July, the Fiscal Court began legal actions against five previous loan holders who had not, as of that time, taken advantage of opportunities to refinance the loan or make payment arrangements.
Those loans, totaling nearly $90,000, are still in litigation. Judge Stephens said he hoped to be able to provide the Fiscal Court an update on the process for collecting those loans in January, as well as an update on the overall status of the loan program.
Several of the older loans in the program, dating back more than eight years for instance, had to be written off as uncollectable bad debts due to a lack of proper documentation or collateral attached to the loans.
For the past couple of years the Fiscal Court has authorized a grace period for several delinquent loan holders, allowing them to renegotiate the terms of the agreements.
The individuals who have taken advantage of the amnesty have been allowed to restructure their loans, mostly with a lower interest rate and a new schedule for repayment.