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Panel Offers Insight Into Access to Capital in the Lehigh Valley

By George Lewis on October 9, 2018

Small businesses in the Lehigh Valley have multiple federal, state and local options to obtain financing that can help them start, grow and prosper.

A panel of financing professionals explained those options in a program presented by the Lehigh Valley Consortium of Professional Organizations and sponsored by the Lehigh Valley Economic Development Corporation (LVEDC) Oct. 3 at the Barristers’ Club in Allentown.

“Access to capital is essential for growing businesses. LVEDC is the single point of contact for companies in the Lehigh Valley that are considering public financing programs,” said LVEDC President & CEO Don Cunningham, who served as moderator for the panel discussion.

U.S. Small Business Administration loans, and the process for obtaining them, were outlined by Sherwood Robbins, managing director of Seedcopa, a private, non-profit organization based in Chester County. LVEDC’s Doug Warfel, director of Business Recruitment and Lending, described features of state and county business loan programs. Chris Hudock, director of the Rising Tide Community Loan Fund, a Bethlehem-based affiliate of the Community Action Committee of the Lehigh Valley, reviewed micro-loan and technical assistance his agency offers to businesses that may not be able to get bank loans.

“Seedcopa helps borrowers negotiate the SBA loan process and understand the requirements,” Robbins said. “Through SBA programs, we can partner with lenders at market rates fixed for 25 years, which minimizes interest rate risk over the long term, and with lower out-of-pocket costs that allow growing companies to keep more of their money.”

LVEDC partners with Seedcopa, referring Lehigh Valley small businesses that can benefit from SBA loan programs so Seedcopa can help them get the financing they need.

LVEDC’s Warfel noted that Pennsylvania Industrial Development Authority loans mirror SBA programs, with interest rate certainty and ability to retain capital. Pennsylvania also has an equipment loan program, but funding of that program has been reduced.

“Our mission at LVEDC is to market the economic assets of the Lehigh Valley,” Warfel said. “These loan programs are one of the assets we can market.”

Hudock explained that Rising Tide has a different structure than government financing programs and provides an alternative for start-up and established small businesses whose risk factors make it more difficult to get funds from traditional lenders. Established in 2001, Rising Tide has provided $6.7 million in loans to more than 180 Lehigh Valley businesses.

“We exist to help businesses that don’t have other options,” Hudock said. “Financing through Rising Tide helps businesses grow to the point where they can become ‘bank-able.’”

In addition, he said, federal and state small business loan programs have job-creation requirements that may be out of reach for some borrowers. Rising Tide loans do not have those requirements, but they have resulted in the creation or retention of jobs in the Lehigh Valley.

The Lehigh Valley Consortium of Professional Organizations, which presented the small-business financing program, is an interdisciplinary group of professionals in fields that include law, insurance, finance, real estate, accounting, and engineering.

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