The Rockford Local Development Corp.’s for-profit arm, which is responsible for uplifting economic development and restoring distraught properties, is all set to get an investment from Winnebago County and area banks. Both the County and the banks will partner with the city of Rockford to extend their monetary support.
The collaboration is named as the Northern Illinois Community Development Corp. and manages a loan pool worth $1 million for small businesses. This partnership has a lot to offer because, according to the officials, the current demand for monetary loans exceeds the available resources.
The six area banks and RLDC own the Northern Illinois Community Development Corp. The corporation has now approached six new banks and invited them to purchase ownership shares, which will help expand and recapitalize the existing loan pool.
With the new investment that promises to be worth $3.5 million, more low-interest loans will be available for Winnebago County’s small businesses. It has also been reported that out of these funds, at least $1 million will be earmarked for small businesses which are resurrecting abandoned and damaged properties and turning them into proper housing with owner occupation.
It is believed the new investments will give the corporation $4.5 million, which will be available for investment in Winnebago County and Rockford’s small businesses. This will include a major chunk of $200,000 each from the County and Rockford.
Tom McNamara, the Mayor of Rockford, said that the city’s economy is driven by small businesses. He also said that Rockford will take its investment share out of its Redevelopment Fund. The fund gets its capital from the tax of 1% on tavern tabs and restaurant and hotel bills. The fund’s primary purpose is not just to finance downtown’s redevelopment but also cover the deficits of BMO Harris Bank Centre.
The Mayor further applauded the key role played by Frank Haney, the Chairman of Winnebago County’s Board and the board member Fred Wescott to put the loan expansion program into motion.
The Mayor continued to say that the businesses could use the loans to buy important equipment, purchase new technology and invest in introducing new product lines. This could help small businesses hire new employees and expand. Haney also said that he is trying to convince the board members to sanction a $100,000 annual investment for two years.
He further said that a partnership among 12 banks is a very exciting prospect and the collaboration shows the kind of possibilities that can arise when the community comes together. According to Haney, it would require more than one agency to make a difference and achieve bigger development targets.
John Phelps, the Executive Director RLDC, said that the partner banks are not looking to profit from this collaboration and their only motivation is to do good for the community.
The banks could only profit from this if the corporation decided to pay dividends and so far it has not done so. He further said that the main purpose of the investment is to increase economic growth. He gave the example of the low-interest businesses loan that RLDC gave to 16 small businesses in downtown Rockford.