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Woodford Co. loan fund has helped businesses

Woodford Co. loan fund has helped businesses

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EUREKA - Woodford County's Revolving Loan Fund has revolved at least four times in its 20-year history of helping businesses grow.

Starting with $1 million available in 1987, the fund has distributed more than $4 million in loans to local businesses.

Currently, 26 loans are active in the amount of $951,000. Another $861,000 is available for future loans - an amount which grows monthly as about $20,000 in loan payments are received.

"It is nice to have funds to use, but at the same time we'd like to make sure we use it," said Kyle Ham, Woodford County economic development director. "The purpose of the fund is not to let the money sit."

The program offers loans to new or expanding businesses in order to create more jobs. As businesses repay the money at 5 percent interest, the fund grows and enables more loans.

"The whole point of the Revolving Loan Fund is that the principle and interest keep it alive," said Ham. "It should go on forever if we use it right."

Funds are tied closely to job creation and retention. Generally, the program expects a new full-time job or two part-time jobs for every $10,000 lent.

For each prospective project, businesses are required to obtain traditional bank loans in excess of what Woodford County offers. For example, a typical project could be a $500,000 expansion with a bank lending $300,000, the county lending $150,000 and the owner providing in $50,000 equity.

Ham said, since its inception, the Revolving Loan Fund has help create $30 million in new and expanded business projects like restaurants, building contractors, auto dealerships, grocery stores, motels and trucking companies.

"It really is across the spectrum of almost all types of business," said Ham.

He estimates one in 15 to 20 loans default, but the risks are worth taking.

"We compare it to a bank. Banks don't always win, but we stay net ahead," said Ham. "Success relies on due diligence on the front end. You have to have some level of confidence to make sure they will put in the effort to see the business succeed."

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