Lender of last resort
A company that serves as a lender of last resort for local start-up companies and nonprofit groups has filed for bankruptcy reorganization.
The Hawaii Community Loan Fund filed for Chapter 11 reorganization on Feb. 23, listing assets of nearly $1.8 million and liabilities of $2.2 million.
Paul Rehob, executive director of the nonprofit company, said HCLF ran into trouble recently after it had to charge off a number of loans that it made to local entrepreneurs.
"We hope to come out of this and continue our mission of helping to make things better for small businesses," said Rehob, a former local banking and Chamber of Commerce of Hawaii executive hired in November to turn around the company
"There have been a lot of success stories, but unfortunately there have been several charge-offs."
Rehob said that the HCLF is working with creditors and has moved to cut expenses. He added that the company is no longer making loans to local businesses and has put on hold its training and technical assistance programs.
Created in 1997, the HCLF is a certified Community Development Financial Institution.
The company provides capital for local businesses and nonprofit organizations that wouldn't otherwise qualify for a traditional bank loan.
As of October, the company had issued 127 loans totaling $4.5 million. The loans, in turn, helped create or sustain more than 350 jobs statewide, HCLF said.
In its bankruptcy court petition, the company said its largest unsecured creditors include the Bank of Hawaii, owed $1.2 million, and American Savings Bank, owed $500,000.