Friday, March 13, 2015
C. J. Huff explains $29 million loan in simple terms so we can understand
Because he is aware of his audience, Huff says he decided to tell us in simple terms so we could understand.
Today Joplin Schools Board of Education met once again to discuss financing options to finish our post-disaster reconstruction projects. I could go into detail trying to explain a complicated topic but decided to explain it instead in the following simple analogy.
Let’s say you and your family lived in a $100,000 home. In the night your home catches fire. Thankfully your family is fine, but your home and all its contents are completely destroyed. For the sake of this example, let’s pretend your insurance company paid for the replacement of your home but only on a reimbursement basis. So you hire a contractor, and 12 months later your home is rebuilt and you and your family move back home. Now that construction is complete, you can submit the bills to the insurance company for review and reimbursement. For 4-6 months following your bill submittal, the insurance company reviews your construction costs to make sure you built it back within the parameters of your insurance policy. Finally, 16-18 months after the fire, the insurance company agrees with your bill submittals and issues you a check for $100,000 for the replacement of your home. Where would you get the $100,000 to build your home as you waited for reimbursement?
We need to finish what we started. This short-term financing allows us to do that. CJ