ROCKINGHAM, Vt. – On Tuesday, June 7, the Rockingham Selectboard discussed two applications recommended by the Rockingham Revolving Loan Fund Committee.
The Revolving Loan Fund (RLF) is a source of capital assisting in start-up and expanding businesses. It is available for all applicants who meet program eligibility and lending requirements. Funds are available on a first-come, first-served basis and the disbursement of funds is contingent on an available fund balance. The RLF Committee recommends applicants, but the final decision is upheld by the selectboard.
The RLF Committee is made up of Development Director Gary Fox, Chair Katie Dearborn, selectboard members Rick Cowan, Vice-Chair Susan Hammond, and Rebecca Gagnon. The recommendation for the board was for two loans; $50,000 to Deborah Fox for the Miss Bellows Falls Diner and $38,000 to Kari Gypson and Cassandra Pedigo for the Twin Falls Training Center.
First, the board discussed the Miss Bellows Falls Diner. Chair Peter Golec said, if refused by the bank, they are looking to replace capital, and the risk now belongs to the town. Gagnon explained that the minutes showed the committee’s questions, but board members did not have them to view. She said the committee had asked Deborah Fox, if funding was not approved, would the project continue, to which Deborah Fox said she would be unable to continue without the RLF loan.
Gagnon said the committee’s recommendation was outside the purview of the bylaws based on their type of funding and approval. Cowan said, “[The] significance of Miss Bellows Falls Diner for the community…and real estate as collateral…justified” that.
Golec noted that the town is the first mortgage if the loan defaults, meaning the town owns the diner. He wondered if Deborah Fox “had any skin in the game.”
Deborah Fox responded to the RLF recommendation, “I can afford to pay back what I’m asking for…regardless” of activity in the diner.
Cowan said Deborah Fox’s income “far exceeds” the loan’s monthly payment. He added, with her high credit and character rating, “Her record in the community and as a business person suggested she was a good risk.”
Deborah Fox explained that the reason the banks denied loaning her the funds was because she could not show previous income paperwork and they were looking at both the property and operation.
Cowan asked whether the building inspection was part of the purchase and sale agreement. Deborah Fox said the inspection did not reveal any significant repairs needed. She explained that part of the business plan was to raise money for the historic renovation of the car, through the Go Fund Me platform. Fox estimated she would need $35,000 for restoration on the car itself.
Gary Fox said the purchase price was $65,000, so Deborah Fox invested capital. He said the applicant is seeking private investors which is not a problem; it would be ineligible if she was using the loan to pay off private debt. He said the RLF is there to help businesses that the committee feels are a secure bet to operate in town.
Deborah Fox said she has three investors and is looking for two more. Gary Fox said, “It’s an opportunity to have activity in the building.”
The board approved the $50,000 loan at 4% interest with a 4-1 vote, Golec voting “Nay.”
In the second loan recommendation for Twin Falls Training Center, Cowan spoke highly of the applicants; Gypson and Pedigo. He said they bring “a strong clientele, lots of expertise, and provided a crackerjack business plan.”
Gagnon agreed the proposal “was professionally presented and well written.”
Pedigo explained they had the equipment and their plans included checking the HVAC system and minor interior upgrades. On contamination concerns, Fox explained that in the past, that area of the building had a food operation business. The board approved the $38,000 loan at 4% interest.
The RLF encourages Disadvantaged Business Enterprises to apply and qualified applicants can have access to loans from $5,000 up to $50,000. In addition to the RLF program, Rockingham also has a housing loan fund that can assist property owners on owner-occupied multi-family properties.
For more information on these programs visit www.rockinghamvt.org/exoffices or contact the Development office.
The Rockingham Selectboard meets once per month through September; the next meeting is Tuesday, July 12 at 6 p.m.