County to Impose Stricter Penalties in Revolving Loan Fund Agreement

Effingham, IL / Effingham Radio
County to Impose Stricter Penalties in Revolving Loan Fund Agreement

Penalties will soon be more stringent for borrowers who stop making payments on county loans. The Effingham County Economic Development Committee met on Monday and discussed adding more teeth to their agreements for the Revolving Loan Program. The program is an economic development tool for individuals looking to start, or expand a business. The county expects that borrowers will ad a new job for every $15,000 loaned.

However, the county has been having difficulties with some borrowers not keeping up with their payments, and in some cases, ceasing all communication with county officials. They are in the midst of taking legal action against one borrower who has stopped paying, or communicating with, the county.

While loan agreements already have legal ramifications for borrowers who aren’t paying, the county is looking to clarify, and increase, those penalties. Board Chairman David Campbell said that one likely change will be the addition of a UCC (Uniform Commercial Code) agreement that allows the county to more easily seize and sell assets to pay off debt. Campbell also said that other wording in loan contracts would be changed to give borrowers more incentive to pay back the county.

The fund currently has $38,346 available to loan and is seeking applicants.

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