Butler County Times Gazette
  • API reconsiders requirements for loans

  • Augusta Progress Inc. didn’t have a quorum at a special meeting Tuesday morning but they still hashed out some changes to the loan requirements and application process.
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  • Augusta Progress Inc. didn’t have a quorum at a special meeting Tuesday morning but they still hashed out some changes to the loan requirements and application process.
    The economic development group has fallen victim to several failed business loans. One issue that brought the loan process into question was a second barbecue restaurant applying for a loan with API.
    No Mercy is a barbecue restaurant in downtown Augusta that has a loan with API. Not only is their loan not failing, but they are up to date on payments and working hard to build their business.
    Mayor Kristey Williams said she wasn’t interested in bringing in a direct competitor for a company that was doing a good job repaying its loan. She said having two loans for the same kind of business was a bad business plan that almost guaranteed one would fail.
    “One or both would almost surely not make it and we would lose our money on that loan,” Williams said.
    She said she understood not picking winners and losers but when it comes to issuing loans, she thought API helping open a direct competitor to another restaurant they had assisted made little sense.
    API Board Member Bill Eberhardt said he didn’t want the group to have any more loans fail, but he had a problem with the fact the company had been trying to get an answer on its application for more than a month.
    “We haven’t been able to even get the loan committee together in a month,” Eberhardt said. “I know we are a volunteer board and were all busy, but that still isn’t good.”
    The group is working on new conditions on the loan program including a clause that didn’t allow a loan to be offered to a business that would compete with an existing loan recipient. They also want to include requirements for training for the new business and also the recipient provide at last 7 percent of the capital themselves.
    “Most businesses that fail are because they are undercapitalized,” said API board member David Bisagno. “They have to have some risk of their own.”
    The board will also propose a clause including the reasons a new loan could be declined in the future.
    No official vote could be taken Tuesday, but a consensus of those in attendance indicated it was unlikely a new loan would be offered to the second barbecue restaurant.
     
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