The governing board of the V.I. Economic Development Bank voted to charge off two loans worth $908,000 at a meeting last week.
Wayne Stevens, doing business as Wayne’s Ice Delight, has $8,000 in bad debt with Banco Popular, and American Paradise Management Global Group, LLC, has $900,000 in bad debt with Merchants Commercial Bank.
The board voted to charge off that debt at Tuesday’s meeting.
In response to questions from The Daily News, Economic Development Authority CEO Wayne Biggs Jr. noted in an email Tuesday that “the charge-offs were from the USVIEDA’s General Ledger Allowance for Bad Debt Account only. Collection efforts by the banks will continue by the banks through their legal process.”
He also explained why the debt was charged off, and the effect.
“The participating banks called the 50% State Small Business Credit Initiative (also known as SSBCI) loan guarantees that the USVIEDA provided for collateral support to induce the banks to make the loans,” Biggs wrote. “As a result, the Allowance for Bad Debt account has to be reduced by the equivalent amount to offset the expensed payment of the guarantees. Therefore, the assets on the USVIEDA’s financial statement will be decreased by the corresponding amounts.”
He reiterated that “collection efforts will continue by the banks through their legal process, and any funds received during the collection process will be considered a recovery. None of USVIEDA’s loan programs will be adversely affected by this action.”