The Wisconsin Economic Development Corp. Board has approved a special loan program to help suppliers affected by layoffs at Oshkosh Corp.
The company recently laid off 760 employees after a contract with the Department of Defense ended. While the company is bidding on another large federal contract, the company has cut back on staff and production in the interim. That, WEDC top operating officer Ryan Murray argued at a board meeting yesterday, leaves some supply chain businesses in need of crucial gap funding.
Murray said the program was already in the works in response to other small businesses seeking this sort of assistance but that the Oshkosh suppliers required urgency.
Also at the Janesville meeting yesterday, a report showed only 2.1 percent of WEDC’s loans are now considered delinquent.
WEDC VP of Credit and Risk Jake Kuester said today the low rate represents progress in getting regular loan payments on track. This comes after the loan portfolio failure in 2012 that led to several audits and executive turnover.
“Two-point-one percent on a high-risk loan portfolio; that’s pretty damn good,” said board member and FluGen CEO Paul Radspinner. “I mean, those are companies that can’t get loans from banks.”
Kuester acknowledged that one of the largest outstanding delinquencies came from Kestrel Aircrafts, which has $4 million in loans from WEDC. Kestrel was also one of the major players advocating for an aircraft production tax credit recently signed into law by Gov. Scott Walker.
Officials have cautioned that Kestrel is still a startup trying to get its product to market and will get back on track with payments once that income starts coming in. Kuester said the company has applied for an amendment to its loan to change the terms going forward. If approved, it would likely be removed from the list of delinquent loans.
— By Jason Smathers