Minnesota's Nonmetro Cities Use Revolving Loans as a Development Tool

Thomas Stinson and Andrea Lubov

Rural America/ Rural Development Perspectives, 1992, vol. 08, issue 2

Abstract: Nearly 100 of Minnesota's nonmetro towns use revolving loan funds as a way to spur local economic development. Here's how they work: a town makes the initial loans to qualified businesses, and as the loans are repaid, the money is loaned out again and again to other businesses. A few problems need to be worked out: default rates somewhat higher than those experienced by other lenders, slow accumulation of funds needed to make second-generation loans, and slow turnover in "revolving" the funds to the next round of businesses. In city-based programs, there is also the risk that viable projects are going unfunded in towns without access to a revolving fund.

Keywords: Community/Rural/Urban Development; Public Economics (search for similar items in EconPapers)
Date: 1992
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Persistent link: https://EconPapers.repec.org/RePEc:ags:uersra:310978

DOI: 10.22004/ag.econ.310978

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