Shunned by its bank, an 82-year old Iowa grain elevator company was saved from closing its doors for good thanks to a loan from a credit union.
The Ottumwa, Iowa-based Community 1st Credit Union recently provided a guaranteed loan to Troy Elevator through the U.S.D.A. Rural Development Loan Program. The $310 million CU began working with the business in December 2009. After receiving the loan this month, Troy Elevator was able to reorganize their operations and keep all 40 jobs in Iowa.
"We knew Troy Elevator was having issues with their lender and we didn't want to see them close their doors," said Terry Maloy, president/CEO of Community 1st. "We care not only about Troy Elevator, the communities they are in, but also their employees and families as well."
Troy Elevator, which has been in business since 1928, suffered severe tornado damage at its Pulaski, Iowa site in 2008, according to the CU. Robert Newton, president of Troy Elevator, began working with his lender at that time to restructure the company's long and short term debt, in an effort to recover from the damages. In January 2009, the lender informed Newton they would no longer do business with them.
"We had never missed a payment or been late in our 18-month relationship with the bank," said Newton. "We were completely shocked and frustrated that they wouldn't help us."
While Community 1st was able to make the loan to Troy Elevator, it may not be able to do the same for the next struggling business owner. The CU said it is currently at its 12.25% of assets member business lending cap.
When the U.S. Senate returns from the August district work period, they will consider H.R. 5297, the Small Business Jobs and Creation Act. An amendment offered by
Sen. Mark Udall (D-Colo.)
on this legislation would increase the MBL cap. If enacted into law, this cap increase is estimated to create more than 100,000 new jobs and add $10 billion of new capital into the economy for business owners to borrow, according to the league. In Iowa, this would amount to approximately $137 million in new lending and more than 1,400 jobs, the league said.