Saturday, April 18, 2015

City Borrows Money, Will Pay Some Vendors

For cash-strapped city vendors, there was a little good news today.

City Borrows Money, Will Pay Some Vendors

For cash-strapped city vendors, there was a little good news today.

Mayor Nutter announced today that the city has taken out a short-term loan of $275 million from JPMorgan Chase & Co, much of which will be used to pay city vendors who haven't received checks since July.

The city will pay about $200 million of the $225 million currently owed to vendors, Nutter said. Payments are expected to start going out next week, according to a spokesman for the mayor.

But the loan has some strings attached. It's set at an interest rate of 3 percent until November 30th. After that, the rate jumps to 8 percent. Nutter said he hopes that by that point, the city will have resolved the current budget crisis and will be able to refinance. The city is currently waiting on a vote by the state House of Representatives next week on legislation that would provide budget relief.

In July, Nutter said that in an effort to preserve cash, the city would stop paying most bills, except for payroll, worker benefits, debt service and situations deemed emergencies. Moving forward, some bills will still be delayed, as the city continues to conserve cash.

About this blog
William Bender, a Drexel graduate who landed at the Daily News in 2007, has covered everything from South Philly mobsters to doomsday hucksters. He occasionally writes about local food trucks and always eats everything on his plate, whether it be a bloody rib eye or a corrupt politician. E-mail tips to benderw@phillynews.com
 Follow William on Twitter

David Gambacorta, has been a reporter with the Daily News since 2005, covering crime, police corruption and all of the other bizarre things that happen in Philadelphia. Now he’s covering the 2015 mayor’s race, because he enjoys a good circus just as much as the next guy. He’s always looking to get a cup of coffee. Send news tips and other musings on life to gambacd@phillynews.com
 Follow David on Twitter

PhillyClout Team
Also on Philly.com
Stay Connected