CHICAGO — Illinois' Department of Human Services expects to expand a pilot program early next year that links state vendors with private investors willing to purchase overdue vouchers as the state's liquidity and budget crisis shows few signs of easing.

The DHS vendor payment pilot program was launched in October, making up to $100 million in private cash available to cover late payments from various lenders, including commercial and investment banks. The state expects the capital will be available to cover up to $2.5 billion of eligible bills under the expanded program that will be unveiled during the first week of 2011. In exchange, the lenders collect the 1% monthly interest payment the state otherwise would owe the vendor after 60 days.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.