A behind-the-scenes change means Crawford County's revolving-loan fund will continue to help new and existing businesses. The only difference those who benefit from it are likely to see, however, is where they make their payments.
The Crawford County Board Tuesday voted to turn over the loan fund to the Crawford County Development Association. In return, the CCDA will pay the county $10.
Board Chairman David Fulling explained the association was charged the nominal fee because it is a not-for-profit, economic development entity working to help the county.
The $750,000 in outstanding loan payments will now be made to the CCDA, not the county, effective immediately. The association will then be able to loan the money back out as it comes in.
"As long as we don't have too many defaults, this should be able to go on forever," CCDA Executive Director Alex Pleasant said.
The size of the loans the group makes will depend on how much cash is available. Most businesses with outstanding loans pay in a timely manner, meaning the fund recoups about $10,000 per month, Crawford County Treasurer Twyla Bailey said.
The change was necessitated by the decision of the U.S. Housing and Urban Development Agency to discontinue the program that created the revolving loan fund in the first place.
About two years ago, HUD audited the program and determined many local governments participating had not made loans with the money they had been given.
Crawford County was not among those governments, however. In fact, its revolving loan program was the most successful of its kind in Illinois.
HUD announced the government entities would have to return any money paid back to them. However, "selling" the loans to the CCDA meant that all future payments would stay local.
CCDA has administered the revolving loan for several years. The money was paid back to Bailey's office. Now, it will go back to the CCDA.
As for money already paid back, it will go to Springfield, which is expected to return the money to the county in the form of a community development grant. In Crawford County's case, that came to almost $1.5 million as of the end of February.
The grant is non-competitive, meaning the county is already approved for it. It will have two years to determine a use for it, such as economic development or community improvements that meet HUD guidelines.
If the money has not been used after two years, it will go back to the state and become part of a competitive grant program for which any community in the state could apply.
An ad hoc committee is looking into possible uses for the grant.