California Dealer Seeks $250K City Loan
The city council in Porterville, a small city in California's San Joaquin Valley, is considering whether to loan $250,000 to Porterville Chrysler Jeep Dodge. The dealership's owner, Mark Shipley, told the council that his store faces a financial shortfall as it recovers from losing its floorplan financier, Key Bank, in July 2009, according to the Porterville Recorder.
PORTERVILLE, Calif. — The city council in Porterville, a small city in California's San Joaquin Valley, is considering whether to loan $250,000 to Porterville Chrysler Jeep Dodge. The dealership's owner, Mark Shipley, told the council that his store faces a financial shortfall as it recovers from losing its floorplan financier, Key Bank, in July 2009, according to the Porterville Recorder.
At that time, Key called in its existing capital loans, which Shipley was able to satisfy with the help of a Small Business Administration (SBA) loan. The loan from the city, of which $150,000 would be allocated specifically to floorplanning, would allow the dealership to fill the gap between lenders and, according to Shipley's request, allow him to add at least seven employees.
Terms of the loan would require Shipley to repay the city at an interest rate of 2 percent within five years or until he finds financing from another source, whichever comes first.
If approved, the funds would be drawn from the city's Business Assistance Program. The municipal agency directs funds from the federal Community Development Block Grant (CDBG), a program administered by the United States Department of Housing and Urban Development (HUD). The CDBG was signed into law by then-President Gerald Ford in 1974, partly to spur employment in areas of economic need.
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