"With the lower rate environment we're at, the challenge loan typically isn't less," Ryan Whitehead, business finance program manager for the Business and Industry Division of the Wyoming Business Council told the Business Report. "The current rate environment encouraged us to do the change to benefit the customer, or technically the third-party recipient."
Currently, the program requires a minimum of 4 percent interest plus fees of 1.25 percent for a loan. The proposed change would make 4 percent the highest rate that could be charged, plus fees of 1 percent. But with the current rate structure in place, Whitehead said they've seen less demand for new loans. The program allows the state to cooperate "with local economic development organizations in matching loans for the benefit of area businesses."
According to Whitehead, banks step in to participate in the program.
"Through the Challenge Loan Program, the bank diversifies some of those [loan] risks through participation," he said.
The changes must pass through next year's legislation to be adopted.
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