Low-Interest Loan Program Administered By LVEDC Produces Many Success Stories
By Colin McEvoy on January 26, 2015
A Bethlehem-based technical ceramics manufacturing company recently closed on a loan that helped them undertake a major expansion project last year. It is just one of many success stories from across the region for a low-interest state loan program administered by the Lehigh Valley Economic Development Corporation (LVEDC).
National Magnetics Group, Inc., expanded their 50,000-square-foot facility at 1210 Win Drive, adding another 30,000 square-feet of manufacturing and warehouse space. The $1.9 million project was funded in part by a $951,000 Pennsylvania Industrial Development Authority (PIDA) loan, which LVEDC helped it obtain.
“The PIDA program was great because it gave us very low-cost financing,” said Abby Oberbeck, executive vice president of National Magnetics. “LVEDC was outstanding. They made us aware of the program, offered their help and continued to make us aware of everything they could do for us. They’ve been even more efficient and better organized than our private lending partners.”
PIDA, one of several financing programs LVEDC administers, offers low-interest loans through industrial development corporations to businesses for land and building acquisition, construction and renovations that results in the creation or preservation of jobs.
“The PIDA program is a powerful tool, and it’s just one of the many economic development incentives we have to offer,” said John Kingsley, LVEDC vice president of finance. “Our finance department administers more than a dozen state and federal programs to help companies grow and succeed here in the Lehigh Valley.”
The PIDA program, considered by the majority of lenders to be Pennsylvania’s flagship economic development lending program, can finance up to $2.25 million with a term of up to 15 years. LVEDC has helped secure $10.7 million in PIDA loans for seven companies in 2014 alone.
Among them were a $2.25 million loan for Hospital Central Services Inc. (HCSC) for a 21,000-square-foot expansion to its Allentown facility, without which company officials said they might have had to leave the Lehigh Valley altogether. LVEDC also helped obtain $2 million in PIDA loans each for the Flexicon Corp. and Straight Arrow Products, as well as a $1.95 million loan for the Follett Corp., all for major renovation and expansion projects.
In total, the PIDA loans from 2014 resulted in the retention of about 780 jobs and the creation of about 200 new jobs. So far in 2015, LVEDC has already helped Lehigh Valley Technologies, Inc., an Allentown-based pharmaceutical manufacturer, obtain a $2.25 million PIDA loan for the purchase of a second facility, which will retain 36 full-time jobs and create 52 new ones.
The National Magnetics loan was approved in June 2013. The expansion began in December 2013 and was completed in October 2014. By having access to the PIDA money, National Magnetics had the capital necessary to acquire the New Jersey-based Ceramic Magnetics, one of three companies it has purchased in the past year-and-a-half.
Prior to the extension, National Magnetics had about 80 employees. Oberbeck said it will have 145 once the Ceramic Magnetics is moved to the newly-expanded Bethlehem facility.
“We’ll have added 65 jobs to our facility here in Pennsylvania,” she said.
National Magnetics manufactures ferrites, garnets, magnets, dielectrics and material for thermal barrier coatings for 250 customers in the aerospace, automotive, defense, telecommunications, semiconductor and medical industries. The company moved to Bethlehem from Newark, N.J. in 1991, growing through the acquisition of companies and expansion of product offerings.
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