The Providence Economic Development Partnership will soon begin lending again. That’s good news for entrepreneurs still struggling to find financing elsewhere and for a city that also deserves credit for taking decisive, aggressive action to keep the nonprofit alive after a damning federal review.
The new PEDP will still be a lender of last resort, but will operate very differently internally, with increased oversight of lending that includes Department of Housing and Urban Development approval of all loans. The nonprofit will also take more responsibility for ensuring the businesses it decides to fund have legitimate growth potential, new Executive Director James Bennett, also the city’s economic-development director, told PBN in a page 1 story in this issue.
HUD decided not to shutter the program following a July report that found poor underwriting standards, inadequate monitoring and other problems, but only after Mayor Angel Taveras promised to transform it.
Still to be resolved is $1.5 million in potentially ineligible spending by the nonprofit the city could be forced to repay. The city thinks it can justify two-thirds of that spending and is negotiating potential repayment.
Whatever the city must repay, if anything, it will be worth it if the program’s board learns from the mistakes of the past. With up to $6.8 million in available lending authority through June 30 that could be used to grow jobs, it is a program the city cannot afford to let fail. •