Allentown Economic Development Corporation
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Monthly Archives: August 2017

AEDC Loan Programs Help Spur Business Development and Expansion in Allentown

When David Dunn joined the team at Allentown Economic Development Corporation earlier this year as its new Program Manager of Economic Development Programs, he made promoting the two loan programs that the nonprofit organization administers a priority, as well as getting more loan applications for them.

“Both of the loan programs are designed to stimulate economic development through job creation and business success,” said Dunn. “Effective use of capital is the fire that drives business growth and these loan programs provide the fuel that ignites it. These are great opportunities to secure financing at rates and terms that are better than conventional banks can offer.”

Enterprise Zone Revolving Loan Fund

This loan has a goal of creating and retaining jobs in the City of Allentown Enterprise Zone through business growth and development. Borrowers’ businesses must be located in the zone and they must have an industrial, manufacturing or technology-oriented business. Loans between $35,000 and $100,000 for up to 75 percent of the eligible project cost can be used to acquire or modernize machinery and equipment, improve real estate including new building construction and existing building modernization, and in special cases, for the purchase of inventory or for working capital.

Pennsylvania Minority Business Development Authority Revolving Loan Fund

Administered by AEDC on behalf of the Commonwealth, this loan’s objective is to stimulate growth and expansion of minority-owned businesses and to create jobs in Northampton and Lehigh Counties. Loans of up to 90 percent of the eligible project cost (or $250,000, whichever is less) can be used for machinery and equipment costs, land costs to purchase, renovate, or for new construction. It can also be used for building acquisition, construction, rehabilitation, engineering, architectural, legal and other related costs.

Broadening the scope

Recent changes to the PMBDA program guidelines have expanded the spectrum of who can apply for the loan.

“The PMBDA program has expanded from a focus on ethnic minorities to include socially or economically disadvantaged persons,” explained Dunn. “Someone applying for a loan needs to demonstrate, regardless of sex or marital status, that they experienced cultural, racial, or chronic economic circumstances or background, in order to qualify under this program. This means that many more businesses are now eligible for this loan program.”

Loan Application and Approval Process

Efforts have been made in recent years to streamline the loan application process for borrowers of these programs. AEDC created a common application format for all its loan programs, which is now also being used by multiple economic development entities for multiple programs. For applications that require multiple organizations to be involved, it results in faster processing and less work for borrowers.

“From loan application and submission to evaluation and approval, the entire process now takes a maximum of one and a half months, but can be as short as 2 weeks depending on the borrower’s date of submission,” Dunn explained. “The AEDC Loan Committee meets mid-month and the full AEDC Board of Directors evaluation occurs the following week. If approved, a commitment letter is issued immediately. Then, it is off to document preparation and closing.”

“The loans are ideal for early, middle, or even late-stage entrepreneurs looking to take the next step in their business. Over the years many firms have utilized these financial resources to grow their business and, in turn, hire employees, buy their buildings, acquire technology and maintain sustainable business models that benefit the owner, employees, and community alike,” said Dunn.

To learn more about these loan programs, contact David Dunn at 610-435-8890, or ddunn@allentownedc.com.

Allentown Manufacturers Grow Their Businesses Thanks to Two Loan Programs

The City of Allentown’s Enterprise Zone Revolving Loan Fund and the Commonwealth of Pennsylvania’s Minority Business Development Authority Revolving Loan Fund are two great ways for manufacturing businesses in the Queen City to grow their business.

While each loan fund has different parameters and requirements, in general they will help a business owner purchase important machinery and equipment, purchase land, renovate a building or construct a new one; and can sometimes assist with working capital.

To help illustrate what these loans can do for businesses, we’ve profiled three recent success stories.


LightLab International Allentown

Company founders Mike Grather and Tracy Silvert started the accredited photometric testing laboratory company in April 2015 at Bridgeworks Enterprise Center in South Allentown.

Since the light testing equipment in such a technical field is costly, they applied for a loan with the Enterprise Zone Revolving Loan Fund. LightLab’s $100,000 loan was used toward the purchase of an integrating sphere, which is used to determine the total amount of light, lumen output, and color that a bulb gives off. It was also used toward build-out costs to create the lab space at Bridgeworks.

“The equipment that we purchased with the loan was necessary to round out our scope of testing capabilities,” said Grather. “Without it we would not have been able to offer a full suite of testing services, which would’ve left us at a strong disadvantage in our industry.”

Since acquiring the loan and equipment two years ago, LightLab has achieved accreditation and acceptance into some of the predominant energy efficiency programs like the Department of Energy’s Lighting Facts Program, DesignLights Consortium, and California’s Title-24 program.

“Over the next six to 12 months we are planning to hire one or possibly two more full-time employees, expand our scope of testing services, and continue offering cutting-edge services surrounding new lighting technologies and their application.”


Terra Group

Located in South Allentown’s Bridgeworks Industrial Center, the company’s TECWAR water purification and wastewater treatment systems create potable and utility water from any water source, such as a pond, lake, river or even floodwaters, no matter how contaminated. The systems are portable, scalable, and modular, and can be used in standalone situations in war zones, emergency response scenarios, and disaster relief situations.

In early 2016 Terra Group closed on an Enterprise Zone Loan for $45,700 for the purchase and installation of a walk-in dust control booth that is used in the metal grinding process. Previously, the aluminum frames that hold the filtration systems were made by welders and fabricators offsite who would send the frames to another offsite contractor for metal grinding. Once the piece was done it would be sent to TerraGroup for powder coat painting.

Bringing the metal grinding in-house allowed the company to speed up the process, saving them money and time, while getting each frame to the exact military specifications, a problem the outside contractors often had trouble achieving. But since the metal grinding process involves health and safety issues, a special dust control booth first had to be constructed with proper ventilation.

“Being able to upgrade our facility by adding the new booth has saved a tremendous amount of time by allowing us to keep our products in-house compared to sending them back and forth to outside shops,” said Terra Group President Primo Acernese. “We have very high quality standards for our products so this new booth allows us quickly rework items to meet our level of quality.”

“The process was very simple and much more personalized than working with a conventional lender,” he continued. “The team at AEDC was extremely helpful with any questions we had and they made the entire process quick and easy. We would absolutely consider doing another Enterprise Zone Loan. We are constantly evaluating new projects and ways to improve existing ones. It is great to know this loan program is in place to assist us with future equipment purchases that we might consider.”


Summit Utility Structures

Located in South Allentown, Summit designs and manufacturers engineered products for infrastructure used in high voltage transmission poles for utility companies, wireless communication mono-poles, and traffic, lighting and sign structures for departments of transportation.

Allentown Economic Development Corporation Program Manger David Dunn introduced business owner Raj Pawar to the PMBDA loan program last year. Pawar used $150,000 in loans to aid his company’s growth, which allowed him to increase his staff from 10 to 44 full-time employees. Pawar is currently obtaining another PMBDA loan for $250,000.

“I would recommend that other Allentown manufacturers take advantage of the support that the PMBDA loan program offers to help make their business grow,” said Pawar.

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