County CIC having trouble giving away loan money
LISBON — The Columbiana County Community Improvement Corp. has more than $150,000 to lend small businesses needing help getting started or expanding, but there has been little or no interest over the past several months.
County development Director Tad Herold, whose offices administers the CIC’s small business revolving loan fund program, reported the balance in the fund is $154,883, which is the highest since he came on board several years.
Herold said the bad news is there has been little interest from anyone of late, and he heard the same thing from other state and local agencies that have small business revolving loan fund programs. Board member Marti Grimm is an official at the county Community Action Agency, which operates a small business RLF program, and she said they had no applicants in 2016.
“It seems stagnant all across east Ohio,” Herold said.
The revolving loan program was started more than 20 years ago with seed money from the state, which has also provided additional funding over the years for larger projects. The money repaid to the CIC is used for new loans, but sometimes the businesses fail and the money is not repaid.
That is what happened with Phoenix Corrugated Container, a small container manufacturing business started in Salem. The CIC loaned Phoenix $60,000 in October 2014 at 4 percent interest as part of a $620,000 financial package for the project. Phoenix went out of business last summer and owes the CIC $55,863. The CIC had a secondary position and did not receive any money from the proceeds when machinery and equipment were auctioned in November.
“I think everybody in this got stuck,” Herold said.
As for the balance, Herold said the longer it remains unused, the increased chance the state could require the money be turned over to the Ohio Development Services Agency, so it behooves them to encourage would-be entrepreneurs to step forward.
Herold said the state does allow them to use loan money for public projects that would be eligible for federal Community Development Block Grant money, noting two years ago some of the money was used to help fund a street resurfacing project in East Liverpool.
Board member Roger Hack said they should tell local chambers of commerce about the loan program to help get the word out.
“We’re basically the lender of last resort,” Hack said. “We’re here to create jobs. That’s our mission.”