PITTSFIELD — Town councilors are getting impatient with local business owners who have borrowed money — more than $500,000 in all — from the town’s revolving loan fund and are not making an effort to repay it.
In two cases, the town recently pursued property foreclosures, and it appears the municipality will pursue an even more get-tough attitude in 1998.
In five cases, the businesses have closed, leaving behind unpaid loans. In one case, however, Town Manager D. Dwight Dogherty said Wednesday, a business closed and sold its equipment, allowing the town to recoup $37,000.
Late in 1997, one former business owner, Tom Wright of Wright’s Emporium, defaulted on his revolving loan and the town foreclosed.
“We now own his house,” Dogherty said. Wright is living out of state, Dogherty added, and has made no effort to repay the approximate $95,000 he owed the community.
That is just one example of unpaid loans, Dogherty said. At the end of 1997, Pittsfield had $500,000 in outstanding revolving loans to fledgling businesses, either for start-up costs or expansion plans. Monthly payments ranged from $73 to $1,251.
In late October, letters were mailed to the 15 businesses now repaying their debt. Some of the letters noted that the accounts were current. One business, Duraclean, completely repaid its loan in 1997. But of the 15 businesses contacted, five are seriously in arrears.
“Technically, a business is in arrears if they miss one payment. But we have been very, very lenient. Every situation has been different,” Dogherty said.
Some of the loans are behind by half a dozen payments. Three loans haven’t had a payment since early 1996. Others are paid on sporadically, paying one month’s premium, then skipping the next two.
After reviewing letters and printed updates of the balances due on the loans Tuesday night, it was clear that town councilors expect a more get-tough attitude on those businesses that have fallen into arrears.
More foreclosures could result, Dogherty said, despite the town’s reluctance to enter the real estate business. Dogherty does not want to give the impression that all businesses taking out such loans with the town are deadbeat debtors. “More than half of them have never missed a beat,” he said.
Unfortunately, “it is clear that the council wishes these people to be more accountable,” the manager said.
Accountability is only one reason the loans are being more closely watched. “If some of this outstanding money is not repaid, we won’t have any to lend to new businesses,” Dogherty said.
Scott Harriman, Pittsfield’s economic development director, confirmed Wednesday that he now has five new applicants to the revolving loan fund.
“But we can’t fund them,” he said. Of the five, Harriman said one was a new business and four were existing business expansions.
“We’ve been trying to cut people a break, even when we could foreclose,” Harriman said, realizing that all businesses suffer hard times.