Each year AEDC empowers local businesses to grow and expand through the two loan programs it administers, the Allentown Enterprise Zone Revolving Loan Fund and the Pennsylvania Minority Business Development Authority Revolving Loan Fund.
AEDC begins administering PMBDA loans for Lehigh Valley
In February, AEDC became the official administering agency for the Pennsylvania Minority Business Development Authority Revolving Loan Fund. It already administered the loans for Lehigh County and assumed regional duties from Lehigh Valley Economic Development Corporation.
The loan program’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, real estate acquisition, new construction, rehabilitation, and engineering, architectural, legal and other related costs. Last year, the PMBDA program guidelines expanded the spectrum of who can apply for the loan to focus on ethnic minorities to include socially or economically disadvantaged persons.
Spotlight: Lehigh Human Support Services
Human services entrepreneur Adewale Dosunmu started Lehigh Human Support Services to provide residential support and respite services for people with intellectual disabilities. In 2017 he officially incorporated LHSS and received his state certification on December 8, 2017. The business officially started on June 8, 2018, with four homes: two in Allentown, one in Macungie, and another one in Breinigsville.
Having spent much of his own capital purchasing the initial locations, Dosunmu needed gap funds to support the business period between its first billing and the payment of invoices. AEDC assisted him in securing a $75,000 working capital loan was made possible by utilizing both the Pennsylvania Minority Business Development Authority program and the Allentown Enterprise Zone Revolving Loan Fund.
So far Dosunmu has created 19 jobs, the majority of which are full time, and he expects to hire more in the future as the company grows. He offers his employs an hourly rate that is nearly double the minimum wage because he believes in compensating employees well so that they stay.
Spotlight: Center Stage
Center Stage Lighting & Rigging, Inc. in Allentown expanded thanks in part to a $100,000 Allentown Enterprise Zone Loan which was used to buy new lighting, sound, and staging equipment. The loan prompted the company’s move to a larger space next door to its existing office, which will take it from 3,000 sq. ft. to 8,000 sq. ft. and will add a showroom.
Center Stage handles stage, lighting, and sound production for shows from designing the sets, to setting it up and taking it down. It also rents equipment, performs installation, and does equipment sales. The business works with area concert halls, event centers, theaters, colleges, and high schools.
Spotlight: State Farm Representative Rafael De La Hoz
A Pennsylvania Minority Business Development Authority loan allowed Rafael De La Hoz to take his 3-year-old insurance agency to the next level by purchasing an office building down the street from where his office was located on the city’s south side. De La Hoz opened his agency in August 2016 to fill a need for the Hispanic community in Allentown, and just over a year and a half later, he had over 1,000 customers.
Knowing he needed to expand, he found a building for sale situated on a high-traffic road and approached several area banks for a loan only to find that all of them had a 20 percent down policy and higher interest rates than he could afford. He then discovered the PMBDA loan program and worked with David Dunn of AEDC on the loan application, which resulted in a 15-year loan at a rate that was about half of what the banks had quoted him. The sale of the property closed in March and De La Hoz moved into his new office in May.
How to apply for a loan
What do you need to do to prepare to apply for a loan? Before you put pen to paper you should spend time gathering information and preparing for the larger broad questions that are often asked about your business. Here are some things you should have and do:
- Are you formally incorporated as an LLC, C, or S-Corp?
- Do you have a DUNS number?
- Do you know your NAICS code(s)?
- Accurate and current financial statements
- Business and personal financial statements and tax returns
- Current and projected cash flow statement
Read the rest of the article to find out what you need to prepare HERE.