Tami Lehmann, RLF Administrator for Region XII COG, provided a presentation on working with businesses to help them avoid declaring bankruptcy or defaulting and working with borrowers to assure that payments are made at the conference Create, Challenge, Change: Economic Development Conference for the Denver Region in August 2016. This presentation occurred during the session "Developing Collections Policies that Work."

1. Collections
2016 Economic Development Conference
August 1, 2016
Tami Lehmann, RLF Administrator

2. Loan Closing
Point out the requirements and penalties/fees
detailed in the loan documents
Perfect all liens by recording/filing necessary
loan documents (mortgage, UCC, auto lien,
etc.)
Contact insurance company to get loss payee
information added if not provided at loan closing

3. Loan Payments
Require borrowers to
make monthly
payments via ACH
ACH form completed at
loan closing and
transferred to the bank
Saves time over
processing checks and
leads to mailing fewer
billing statements

4. Insufficient Funds
Charge $20 for
each NSF
Letter mailed
informing client of
NSF and fee
Client must mail a
check or money
order for the late
payment

5. Past Due Loans (15 to 60 days)
Late payments over 15 days assessed penalty
of 1.5% of the payment amount
Computer generated billing statement mailed
once loan is 15-30 days past due
Second billing statement mailed at 30-60 days
past due
Over 60 days past due may call or e-mail client
Report to the Loan Review Committee and
Executive Board on all past due loans

6. Past Due Loans (60-90 days)
Notice of Right to
Cure mailed
between 60-90
days past due.
Client has 30
days to correct
the default

7. Loans in Default
If the loan is not paid current after the 30 day
cure period, may transfer to our attorney and
rate would increase to the default rate
The attorney mails a collection letter giving
them an additional 10 days to correct the default
At this point we decide if we want to file a
judgment/foreclose, etc.

8. Final Collection Efforts
Client/Guarantors may be added to the State
Offset Program
State Offset Program setup in Iowa for all political
subdivisions of the State. With contract, Iowa code directs
the Department of Administrative Services to offset any state
refunds-including state tax refunds & lottery winnings, etc.
If all legal measures have been undertaken and
unsuccessful the loan may be turned over to a
collection agent

9. Workout Tips
Regular contact with borrowers, especially
problem accounts
Collect Annual Financial Statements/Tax Returns or Audited
Financial and Balance Sheet to monitor progress
Site Visits
Obtain Aging of Receivables
How much is the client able to pay?
Let them offer you an affordable amount
Interest only payments
Flexibility is important at times to ensure
continued operation and maintenance of jobs

10. Workout Tips
Be consistent
Give incentives
Waive fees-NSF or late fees
Lower the rate back to the original loan rate
Waive some of the interest which accrued at the default rate
Refer to other resources
Waiting Game

11. Tami Lehmann, RLF Administrator
Region XII Council of Governments
(712) 792-9914
tlehmann@region12cog.org