Business owners and entrepreneurs in Allentown have an arsenal of options when it comes to helping their business fund an expansion, upgrade, or other improvement.
The teams at Allentown Economic Development Corporation, Lehigh Valley Economic Development Corporation, and the City of Allentown want to help businesses grow and expand in the Queen City. Here is an overview of four loan programs offered locally or through the state:
Allentown Economic Development Loan Fund – The City of Allentown offers low interest rate (1-3 percent) flexible loans available to commercial, industrial, and mixed-use properties located within the city. Loan funds may range between $50,000 and $100,000 depending on project size. In order to apply, a project budget must be minimally $100,000; job creation and/or retention must occur; and 10 percent equity is required. All other sources of funding must be identified and client must be working on securing funding. Work with an economic development professional to help leverage your investment with other public funding programs for job creation projects. Contact Bernadette DeBias with the City of Allentown for more information.
Allentown Development Company Loan Program – Administered by Lehigh Valley Economic Development Corp. (LVEDC), loans ranging from $10,000 to $75,000 with flexible interest rates and terms ranging from 1-5 years may be available to eligible Allentown businesses for land acquisition, construction, equipment or working capital. Aspiring loan candidates must be meeting the following criteria: (1) creating or improving job opportunities for low and moderate-income people in economically distressed areas; or (2) projects for the construction or rehabilitation of ancillary local commercial facilities necessary to provide goods or services principally to persons residing in low or moderate-income areas. Contact John Kingsley at 610-266-0887 or Kim Edwards at 610-266-7535 at LVEDC for additional information.
Enterprise Zone Revolving Loan Fund – Administered by AEDC, the purpose of the fund is to assist in business growth and development that creates and retains jobs within the City of Allentown’s Enterprise Zone. Loans can be used for the purchase of equipment or machinery, to modernize existing equipment, for real estate improvements, and sometimes for inventory or working capital. Loan terms are 3-10 years for loan amounts of $10,000 – $100,000.
Pennsylvania Minority Business Development Authority Revolving Loan Fund – Also administered by AEDC, the goal of this program is to create, retain, or expand minority-owned business and create jobs in Pennsylvania. Ownership interest must by 51 percent by a minority as defined by PMBDA. Funds can be used to purchase machinery and equipment, modernize existing equipment, make real estate improvements, and in some cases as working capital or lines of credit. Loan terms are 1- 5 years for loan amounts of $20,000 – $50,000.
Who should apply?
“It’s easier for AEDC to help fund an existing business’ growth since they have a track record of performance, “says Anthony Durante, AEDC’s Program Manager. “But we can certainly fund a startup venture too so long as the owners understand that there is an added level of scrutiny because it is a new business. So having a well thought out business plan will be critical.”
What to expect:
So how long can a business owner expect the application and approval process to take? According to Durante, when it comes to the Enterprise Zone Fund, “the application and review process can happen as quickly as 4-6 weeks if the applicant has all of their ducks in a row. That means a business plan, financial reports, project budget, etc. Once approved, it takes somewhere between 30-45 days for us to prepare the paperwork and check, and to get everything signed off.”
When asked for the key piece of advice he’d offer a loan applicant, Durante said, “Preparation is key. We are going to need financial statements for the company borrowing the funds and the personal financial summaries from the owner(s) for larger loans that will be backed with personal guarantees. We also need a detailed project budget so we know what the money is going towards. The more prepared the applicant is coming in the door, the smoother the process goes.”
AEDC lent Summit Utility Structures a total of $150,000 – $100,000 from the Enterprise Zone Fund and $50,000 from PMBDA – to start a steel fabrication company which sells products to the electric utility industry. Raj Pawar was an entrepreneur with a proven record of success having already paid off a previous loan with AEDC. His project also had a significant economic benefit in that would create jobs almost immediately with a long-term estimate of 35 good paying, manufacturing jobs being created in the city.