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Pontiac approves Genesis Credit Union to run $750K small-business loan fund; council seeks outreach and clarity
Summary
Council approved an agreement with Genesis Credit Union to administer a $750,000 small-business revolving loan fund (loans $5,000–$50,000; 0% first year, 4% thereafter). Council raised concerns about demand far outstripping funding, program prioritization, and communications about eligibility and rollout.
Pontiac City Council on Oct. 8 approved an agreement sending Genesis Credit Union to manage and service a city small‑business revolving loan program funded with ARPA dollars. The program will offer loans from $5,000 to $50,000, require a 10% borrower contribution, generally amortize loans over 2–7 years, and provide a 0% interest first year before a 4% rate for the remainder of the term.
Genesis will be paid $75,000 for administrative and origination/servicing work; council members asked for clarity about the funding source for those fees (administrative set‑aside from the small-business program budget). Administration said grants and loans together total $2M (roughly $1.25M in grants and $750K in loans) and the loan agreement will be signed and put into service by mid‑November. Officials said underwriting standards will be relaxed compared with conventional lenders (e.g., credit score floor around 620) and a scoring rubric will determine award size where demand exceeds funding.
Council members and public commenters warned that application volume may far exceed available funds; staff said the program will be scored by rubric and awarded to top-ranked applicants until funding is expended. Council also stressed the importance of upfront communication so applicants do not assume they will receive funds.
Administration said execution of the bank servicing agreement will constitute obligation of the ARPA loan funds, allowing the city to record the obligation even if loan disbursements proceed later as a revolving fund.
