There are a lot of ways to craft an Alternative Financing Program (AFP) to fund assistive technology. In Wisconsin, WisLoan's emphasis is on providing access to credit for applicants who likely would not otherwise qualify. To do so, it partners with the M&I Marshall & Ilsley Bank and eight Wisconsin Independent Living Centers to deliver a level of service that is unique among programs. The result? An AFP creating relationships with residents with disabilities to serve them across the life span.
Case in point: the Hendersons (not their real name)
The Hendersons first approached WisLoan six years ago for help buying an array of equipment. Mr. Henderson needed a new battery for his scooter and a Hoyer lift (he has Multiple Sclerosis), and they both needed hospital beds and lift chairs (she also has a disability). The Hendersons's needs were significant, but their credit scores were low (under 550 points). With the help of the Wisconsin device reutilization program (Wheelchair Recycling) and WisLoan, however, the Hendersons were able to acquire everything they needed with a loan for just $1,300. That was their WisLoan #1.
WisLoan looks at consumer credit differently than conventional banks. Medical bills, for example, are generally disregarded; and there is an understanding of how individuals with a new disability can fall behind with bills while their disability applications are pending. Each WisLoan application is considered by a loan committee that includes individuals with disabilities, some of whom are bankers, as well as vocational rehabilitation case managers, and other representatives from rural and urban communities around the state. The committee weighs the risks involved with each application, but also has the experience to problem-solve solutions that may not have already been explored.
Despite their poor credit score, the Hendersons proved a good risk. They paid off their first loan and came back a couple years later when their needs changed. Thanks to their improved credit, they were moving out of their rental to a home they had purchased; and now they needed a home modification for wheelchair access. That was their WisLoan #2.
WisLoan subcontracts with eight Independent Living Centers to provide AFP services throughout Wisconsin. The Hendersons, as with any applicant seeking a home modification, were provided with a site visit by an ILC staff person (most of whom have disabilities themselves). Site visits serve a variety of purposes, including helping staff understand what is needed so that they can give advice on affordable solutions (since staff have seen many home modifications). Site visits--coupled with the consumer choice, empowerment, and respect philosophy at the core of the ILCs--also convey a level of care that sends a powerful message to applicants with disabilities. They help initiate lasting relationships that often pay in many ways, such as assuring that applicants know where to go for future advocacy assistance and problem-solving, and perhaps providing a deeper appreciation for the goals of and risk incurred by the WisLoan program.
Indeed, shortly thereafter, the Hendersons were back again. This time for an adapted vehicle so that Mr. Henderson could have reliable transportation. That was WisLoan #3.
The loans, WisLoan Coordinator Patti Kraemer emphasizes, are not all consecutive. The program will roll one into another as new needs come up, and each application is considered by the loan committee on its own terms and within a family's current circumstances.
Indeed, last year they were back again. Mr. Henderson's MS had progressed. He needed a newer lift chair. He also needed air conditioning for his home (MS is aggravated by heat). Their WisLoan #4 covered the air conditioning. The chair was covered by a grant provided by the Wisconsin MS society.
Whenever possible the ILCs refer applicants for grant sources. (They are, of course, few and far between.) Kraemer, who has MS herself, knew the WI Chapter of the MS Society would consider Mr. Henderson's application for a lift chair. And the grant meant a lower loan payment for WisLoan #4. It's the advantage WisLoan sees in partnering with the ILCs. In the course of considering applications, staff can think through other sources of funding, entitlements included. Wisconsin, Kraemer notes, has an SSI state supplement that not everyone is getting, and while small, sometimes it makes the difference with a loan payment.
Today the Hendersons are in their own accessible air-conditioned home, continuing to build a positive credit history. Kraemer knows this may not be the end of their WisLoan relationship. Indeed, she anticipates working with the Hendersons, potentially, for years to come.
WisLoan Nuts and Bolts
- WisLoans are provided to qualifying applicants at an interest rate of 6.5% with a 100% guarantee.
- Loans have ranged from $150 to $75,000.
- 50% of loans have funded vehicle modifications, 15% home modifications, 12% hearing aids.
- Loans have additionally paid for Hoyer lifts, co-pays for wheelchairs, a pontoon boat, a fence, visual aids, adjustable beds, among other needs.
- 56% of WisLoan recipients earn under $25,000 per year.
- 53% of applicants are approved.
- WisLoan's default rate is 6%.
- WisLoan's own funds are 100% invested, while the M&I Marshall & Ilsley Bank funds each loan with its money.
- Defaults, however, are paid out of WisLoan's funds, so the program incurs 100% of the risk.
- WisLoan would like to see the bank take on more of the risk, but it's not likely in the current economy.
Funding and Loan-Making History:
- Between 2001 and 2006, WisLoan has received a total of $3,787,766 in federal Title III funding (through the Wisconsin Dept. of Health Services) matched with $1,262,585 from Independence First (Wisconsin's largest ILC).
- 807 WisLoans, totaling $6,034,298, have been awarded since the program's inception (as of December 31st, 2010).