LVEDC Announces ‘Extraordinary’ $2.5 Million Small Business Financing Program
By Colin McEvoy on July 21, 2015
The Lehigh Valley Economic Development Corporation (LVEDC) and a coalition of regional partners have announced the availability of a new financing program for small businesses that offers up to 90 percent financing of eligible real estate and machinery and equipment costs at a fixed rate of interest for up to 20 years.
The new program is a partnership between LVEDC, PNC Bank, and the National Development Council’s (NDC) Grow America Fund. PNC Bank is committing $2 million to the program, while the NDC is committing an additional $500,000.
With an emphasis on financing existing businesses with a positive financial track record located or locating in the cities of Allentown, Bethlehem and Easton, this new SBA 504 structured loan program offers small businesses a low down payment of 10 percent and 90 percent financing with a fixed blended 20-year interest rate that is currently hovering around 4.00 percent. This is yet another resource for LVEDC to help finance local companies and promote economic growth in the Lehigh Valley.
“There isn’t a primary business financing product out there that I can think of that has such a low fixed rate for such a long period of time,” said John Kingsley, LVEDC Vice President of Finance. “This is rather extraordinary.”
“GAF is extremely excited to continue our great partnership with PNC and to engage our new partner Lehigh Valley Economic Development Corporation to provide an excellent product for small businesses in the Lehigh Valley community,” said Dryck Bennett, Grow America Fund chief of credit.
“Small businesses are the engine that drives economic stability, locally and nationally,” said Kevin Rodgers, lending and investment manager for Community Development Banking, PNC Bank. “The Lehigh Valley Economic Development Corporation and National Development Council’s Grow America Fund have a strong history of providing capital to small businesses. Through our combined resources, we look forward to meeting the needs of businesses owners and contributing to our region’s long-term economic growth.”
The total project amount covered under the program can fall between $500,000 and $5 million. Under the program, 50 percent will be provided by the U.S. Small Business Administration, and 40 percent by LVEDC, leaving the borrowing company responsible for only 10 percent of the project.
“This is another tool in the tool belt of economic development in the Lehigh Valley,” said Don Cunningham, LVEDC President and CEO. “One of the core missions of LVEDC is to serve as a regional shared services and resource center, and providing access to capital is one of our most important priorities. This is another strong example of LVEDC’s ability to implement solutions that promote our local economy.”
The program will be available to businesses in many areas of the Lehigh Valley region, but will be concentrated mainly in the cities of Allentown, Bethlehem, and Easton.
Eligible borrowers include existing businesses in operation at least three years with revenues generally between $500,000 and $20 million, but subject to the SBA size standards by industry. Eligible real estate projects must be owner occupied and eligible equipment is generally limited to that used in production.
Loan requests will be subject to strict underwriting criteria. Personal/corporate guarantees will be required of all owners of 20 percent or more of the subject business.
LVEDC offers access to numerous incentive financing programs to help expand Lehigh Valley businesses. Our financing department works closely with businesses to find a program matching its strategic goals. Click here for more information about these programs.
The PNC Financial Services Group, Inc. (www.pnc.com) is one of the United States’ largest diversified financial services organizations providing retail and business banking; residential mortgage banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management and asset management.
The National Development Council is the oldest national non-profit community and economic development organizations in the U.S. It was founded in 1969 with one purpose: increasing the flow of capital for investment, jobs and community development to under-served urban and rural areas across the country. Since that time, NDC has worked with thousands of communities in every one of the 50 states and Puerto Rico, providing technical assistance, professional training, investment in affordable housing, small business financing and direct developer services. Our work has taken many forms, but we have kept pace with the needs of our constituents, adding new programs and services or updating old ones.
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