Title
Close Out of Micro-Loan Local Revolving Loan Fund Grant Agreement between the Kansas Department of Commerce and Sedgwick County.
Body
The Kansas Department of Commerce awarded Sedgwick County a CDBG-Microloan Grant in the amount of $50,000.00 in December 1998 with an additional $50,000.00 in July 1999, for a total of $100,000.00 to be used as a revolving loan fund for small business loans in Sedgwick County outside of the Wichita city limits. Loans were made to businesses with five or fewer employees, including the owner. Requirements for the loan included that 51% of the employees must be Low or Moderate Income (LMI).The minimum interest rate was 4% and the maximum loan amount was $15,000.00 per loan. The grant has paid an administrative fee of 7% of amounts repaid from outstanding loans per year. South Central Kansas Economic Development District (SCKEDD) has administered the program from the start and has been paid this fee twice a year.
Over the past 20 years, Sedgwick County has issued 28 loans totaling $327,800.00 to a variety of business located across the County. The County has collected principal of $235,648.00 and written off balances totaling $38,474.00. There are no longer any active accounts. The last active loan was issued on September 13, 2013, and it has recently closed through bankruptcy from which the County has received several payments bringing the unpaid balance on that loan to $1,877.00. The existing "microloan fund" bank balance is $122,641.94.
Due to the inactivity of issuing new loans for five years, it is an opportune time for the County to review options for the program. County financial management staff has reviewed several options including the following:
1. Close the program, return the fund balance to the State, and encourage businesses to utilize other small business loan programs that are available for businesses needing financing including (SCKEDD Microloan Program, SCKEDD RLF, Network Kansas, and Small Business Ad...
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