The County recently discontinued the Microenterprise Loan Fund by converting it into a Revolving Loan Fund. The reason for this involves the default rate of the prior and the possibilities provided the County through the latter.
There are now two Van Wert Revolving Loan Funds, the old one, which remains managed by the City of Van Wert, and the new one managed by the County Economic Development (ED) Office. There’s no real drawback in having two funds. There is, however, some large upside in what we have planned for the County’s Fund and a model available from one of our neighbors to demonstrate its potential.
There are multiple reasons why Mercer County continually has one of the lowest unemployment rates in the state while having one of the healthiest population growth rates – no boon, no bust, just steady. But perhaps the biggest is what it has been able to do with its Revolving Loan Fund. More on that success below.
First, the concept. There are multifarious grant and funding sources to keep straight in the County’s strategic plan. I’m going to give the simple version of how we’re arranging it and how this new Revolving Loan is central to it. If you’re the kind that can delve into numbers, agencies, and mind-numbing specifics, contact the County ED Office – Sarah is much like you.
The Revolving Loan program itself works this way: Let’s say a business needs $100,000 for a piece of equipment. A county can apply for a grant from the state to make that loan. The borrowing company then makes payments on the loan straight into the lending county’s Revolving Loan Fund, not back to the state. As the county receives the money back, it can lend it out again. The loan, as the name would suggest, revolves.
But Revolving Loan Funds can also be used to supplement other projects, like infrastructure and revitalization. On our immediate horizon are two projects for which we have submitted grant requests: $300,000 for Ohio City’s storm sewer and $300,000 for the City of Van Wert’s downtown. While we don’t currently have a business requesting the $93,000 in the County’s new Revolving Loan Fund, we can utilize that money in these projects.
Using the Revolving Loan money in this way not only increases funding for each of those projects, but because it appears that the County is investing more of its own money to expand the scope of work, each of the $300,000 applications become more attractive to a grant committee. We find out next month if we win either of these grants.
Worried about spending all the Revolving Loan Fund money? Don’t be. That’s exactly what the state wants done. If we’ve depleted our fund and there is a new request from a business, the County can apply for a new Revolving Loan grant. The state gets the money pipelined from the federal government – it just needs a good reason to dole it out.
Organizing and perfecting this process is where Mercer County, under the direction of Jared Ebbing, has been borderline genius. It has made over $12,000,000 in loans over the last two decades, creating over 1,600 jobs. With administrative fees and loan repayments, the Mercer County ED office now has $35,000 in revenue – monthly. The Revolving Loan Fund managed by OSU Extension on behalf of the City of Van Wert, in contrast, has made $3,000,000 in loans and created 200 jobs in that same period.
There are three prime goals in creating this new Revolving Loan and our general strategic plan. First, and foremost, we want to create a climate for steady growth. Unemployment figures came out this week and they were, as usual, misleading. Although our unemployment rate went up, there were 300 more people working. As long as more people here are working every month at good jobs, that’s healthy growth no matter the labor force participation denominator.
Second, we would like the economic development office to become more than self-financing with grant administrative fees so taxpayers don’t foot the bill with local dollars. We’ve been able to finance most of the work in our new office so far through grants. By learning to do things that consultants have been previously paid to do for us, we’re well on our way.
Third, we want development available to all businesses and the entire county. Ridgeview Hospital will be adding another 150 jobs in the coming months – that makes three hundred in a year and a half with even more possibly coming. One shouldn’t discount what can be done utilizing the strength of an entire county as Mercer does. Using Revolving Loan money to help build infrastructure will loom large in this.
The Mega-Site is one idea – maybe 2,000 jobs overnight but with the drawback of the county being dependent on one large employer. Another idea is to gain 2,000 jobs slowly over the next decade with diverse employers – possibly with even some of our brightest kids staying home to begin new enterprises. What is detailed above is how such things are done – at least how it has already been done one county to the south.