Lisa Simpson
Jun 17,2010
In: Foreclosure

Flint Foraying Into Loan Programmes Despite Mixed Gains

Flint can be counted among the poorest regions in America but the city is taking chances and advancing loans to small business entrepreneurs. The hope of injecting life into gasping economy is spurring the city to go ahead with these plans.

Since 1998, millions of dollars have been given out as loans. More than $3 million has come from federal and state funds. The loans are still hanging in a state of limbo. Over the past decade the success story of these loans have been mixed. There was the case of two hyped business persons who were convicted for putting into their pocket $1.2 million from these loans.

Of the 31 business units that have taken these loans, five have slipped into bankruptcy or is facing foreclosure. Ten have made important restructuring of their loans. The city officials are amenable to taking these risks as this area is caught in a black hole with recession waging all around.

For the small entrepreneurs finance coming from the government is a lifeline during these days when credit or low interest loans from banks are not available. The funds from the government are targeting the worst hit regions of Flint – the townships of Mt. Morris and Genesee. Most of the dollars went to small business houses although some house owners received money during the early state of the programme.

Bernard Lawler is a city councilman. He thinks that positive steps are being taken. He is one of the loan board members. Sheldon Neeley another councilman and board member said that the investments are invaluable for the city as well as the business persons who take the loans.

As an example the newly opened Witherbees Market & Deli in Flint downtown region is held up. There are investments made into two other projects that could generate 150 jobs. David K. Berry is one of the best borrowers. He has taken a loan of $75,000 to open a café in the downtown area – Raspberries Rhythm Café last August. He was all praise for the 5% interest that could not be got anywhere else. He quipped, “The rate was just unheard of – it was that simple for me. The support has been great.”

However of the 43 loans that are active, 17 are delinquent; of these 8 are lagging behind six months in making payments.

It is doubtful if the loan staff will be able to realize unpaid loans as they lack the required aggressiveness.

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