RC defers to professionals for revolving fund loans
ROGERS CITY – City of Rogers City Council members are considering regionalizing control of the city’s revolving loan fund with an organization that could better administer the program.
The city has about $50,000 in a Michigan Economic Development Corporation revolving loan fund for helping new businesses get started and existing ones grow, City Manager Mark Slown said. It’s managed by the city with council members having final say over whether these loans are issued. Now, Slown is recommending the city turn over control to Northern Initiatives, an organization that manages millions of dollars in loans.
“We’re frankly not banks,” he said. “We can issue a loan and do the paperwork, but we don’t have the kind of experience a bank, or commercial or nonprofit lending organization like Northern Initiatives has.”
At its meeting Tuesday, city council asked Slown to find out more about appointing a regional loan committee member to the organization, he said. The committee reviews loan applications, giving them a score and deciding whether to give the loans. Slown suggested appointing someone with banking experience from a local financial institution, but council members were concerned this could create a conflict of interest.
Rogers City has issued loans using these federal Community Development Block Grant funds for about a decade, Slown said. The money has gone to several different projects over the years, the most recent being a local restaurant. After a new owner purchased the business, the sale proceeds paid off the loan.
If city council chooses the regional option it could give businesses more access to capital, Slown said. The city was limited to around $50,000, and had to wait until the loans were paid back before issuing more. While choosing Northern Initiatives would give up local control over the loans, it likely would be a positive move in the long run.
“Northern Initiatives has millions of dollars in loan portfolios already,” he said. “They’re administering and following all those rules. They follow the process and do so on a regular basis. It’s less likely to be screwed up than the local community trying to do it on their own.”
Northern Initiatives also can provide expertise to entrepreneurs and promote its loan programs more easily, Slown said.
In other business, council members approved paying an additional $495 for a new Department of Public Works pickup truck, Slown said. The extra money was needed to cover fees not included in the bid originally presented to council members.
Jordan Travis can be reached via email at firstname.lastname@example.org or by phone at 358-5688. Follow Jordan on Twitter @jt_alpenanews.