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.”
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.
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 firstname.lastname@example.org.