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City of North Liberty sues BlendCard

NORTH LIBERTY– The City of North Liberty successfully filed suit against BlendCard in September for failure to pay a loan agreement, according to city officials and court documents.
The Iowa-based startup company developed a rewards program for small businesses lacking the marketing power of major companies, consolidating them into one card for consumer use and in exchange providing information on consumer habits to the enrolled businesses, allowing said businesses to engage in direct and targeted marketing strategies.
As part of North Liberty’s economic development policy/small business assistance program established in 2012, the North Liberty City Council approved a $25,000, four-percent interest loan to the business startup in August 2014.
At the time of approval, BlendCard CEO Paul Kongshaug said he planned to use the money for operating costs, and to open an office in Liberty Plaza on Highway 965, in the form of a collaborative workspace. The company was one of the first businesses to make use of the North Liberty CoLab located at 215 Hwy. 965, Ste. 1.
According to City Administrator Ryan Heiar, however, the company eventually stopped repaying its loan and no longer had an office in town as per the loan agreement, leading the City of North Liberty, represented by interim city attorney Erek Sittig, to file suit. Heiar said the company paid off the remaining balance of the loan the following day.