Some businesses that have taken out Otsego County micro-enterprise loans are behind on their payments, according to Carolyn Lewis, the county's economic developer.
Most, however, are doing OK despite the recession and are making their payments, if a little bit late, she told the county's Administration Committee on Tuesday.
In 2003, the county received a $363,000 grant from the New York State Office of Small Cities. The money is loaned out to small businesses, typically at 4 percent interest, and is often part of a package to help launch or expand a small business.
``Generally, we lend 40 percent, a bank lends 50 percent and 10 percent is equity,'' Lewis said.
For projects of less than $15,000, the county can lend up to 90 percent of the total cost.
Before making loans, Lewis, her staff and the county's Intergovernmental Affairs and Administration committees review the loan requests.
``A proposal has to make sense from a cash-flow perspective, but sometimes we do take on some risk if it seems the project will benefit a community,'' she said.
Before any loan is made, it must be approved by the full Otsego County Board of Representatives.
Currently, the county has about 16 active loans, with eight either paid up or no more than 30 days late. One loan is no more than 60 days late, and seven are at least 90 days late, Lewis said.
``On the face of it, that doesn't look very good, but when you know the situations better, it's understandable,'' she said.
The Independence Machine & Tool Co., a small machine shop in Colliersville, is more than 90 days behind on payments because of slowing customer demand, but Lewis said it is still a good bet to repay $13,296.
TRC Enterprises of Edmeston is also more than 90 days behind, but it has restructured its loan and has an outstanding balance of $32,049. Lewis said the firm, which installs stainless steel piping, is looking forward to a good spring.
Ashbury Gardens of Oneonta, New York Pizzeria of Richfield Springs, Three Mile Design of Cooperstown, Sweet Home Productions of Oneonta and the Cooperstown Cookie Company are current with their loans.
The Yum-Yum Shack in Index, which owes $20,432, is behind on payments, Lewis said, but as a seasonal eatery, it is likely to catch up on payments later this year. The Lower Deck Deli in Oneonta, which owes $38,596, is behind because of construction delays, she said.
Flax Organix of Morris is behind but still making payments, with a balance of $12,513, and will likely do well when it is able to sell cookies in schools, Lewis said.
Khala-Marr Stables in Otego is more than 200 days behind on payments and owes $56,574, though the businesses is still making payments, Lewis said. The loan is scheduled to be paid off by 2017.
The two most troubling loans, according to Lewis, were made to the West Burlington Pizza-Deli and Cherry Valley Wine & Spirits.
Cherry Valley Wine & Spirits has gone out of business, owing the county $8,148, and West Burlington Pizza-Deli owes $13,199 and has not contacted the county, she said.
County Board Chairman James Powers, R-Butternuts, said Lewis and her staff and other county officials keep tabs on businesses that take loans.
``There is some risk to helping small businesses, but in this economic climate, I think we'd better keep doing it,'' Powers said, as the risk of inaction would be even greater.
___
Tom Grace can be reached at tgrace@thedailystar.com or 847-9806.
