SEDA-COG Offers Businesses New Loan Program

Businesses impacted by the COVID-19 crisis in 11 central Pennsylvania counties now have another funding option – a new loan program established by SEDA-Council of Governments (SEDA-COG).

No payments are due in the first six months for the new SEDA-COG EDA COVID-19 Loan Fund. There is a limited pool of funds available – $400,000 – so interested businesses should apply now. Funds are available until they are exhausted.

SEDA-COG Executive Director John Brown said SEDA-COG worked hard to secure these funds through the U.S. Economic Development Administration (EDA) and thanked them.

“We know businesses are hurting and we are using creative solutions to help meet the current needs in this ever-changing economic climate,” Brown said. “As the local community and economic development agency, we are thrilled to partner with the EDA to further assist our region.”

Doug Wilburn, director of SEDA-COG’s Business Finance program, worked with the EDA to get these funds reallocated for a broad array of businesses since they were originally limited to specific business sectors.

“This loan fund was reallocated by SEDA-COG in response to the COVID-19 crisis. The partnership of SEDA-COG and the EDA will give businesses in our region some relief. SEDA-COG has heard the voice of our communities and we will continue to look for ways to help local businesses through these trying times,” Wilburn said.

The loans are for businesses in SEDA-COG’s region of Centre, Clinton, Columbia, Juniata, Lycoming, Mifflin, Montour, Northumberland, Perry, Snyder, and Union counties.

For-profit businesses can apply for loans of at least $10,000 with an interest rate of 3.25%.

Funds can be used for working capital and can be disbursed based on past working capital expenses.

There is a $500 underwriting fee and a $100 filing fee. For more information, visit https://seda-cog.org/covid-19/ or contact SEDA-COG’s Business Finance Department at cwca@seda-cog.org.

SBA Disaster Assistance Criteria for Businesses Impacted by COVID-19

PA businesses can now apply for disaster loans

The U.S. Small Business Administration (SBA) implemented its disaster declaration for Pennsylvania so small businesses and private non-profits statewide can access SBA Economic Injury Disaster Loans to help alleviate economic injury caused by the coronavirus (COVID-19).

The loans may be used to pay fixed debts, payroll, accounts payable, and other bills that can’t be paid because of the disaster’s impact. The loans offer up to $2 million in assistance for each affected small business. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.

SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

The loans also are available to small agricultural cooperatives and small aquaculture businesses.

Applicants may apply online using the Electronic Loan Application via SBA’s secure website at https://disasterloan.sba.gov/ela. To prepare for the online application, businesses are also encouraged to review the SBA Disaster Business Loan Application forms at https://disasterloan.sba.gov/ela/Information/PaperForms. Paper loan applications can be downloaded from www.sba.gov/disaster. Completed applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.

Disaster loan information and application forms may also be obtained by calling the SBA’s Customer Service Center at 800-659-2955 (TTY: 800-877-8339) or emailing disastercustomerservice@sba.gov.

SBA’s partners can offer free assistance with reconstructing financial records, preparing financial statements and submitting the loan application. Partners include Small Business Development Centers (SBDCs), SCORE, Women’s Business Centers (WBC), and Veteran’s Business Outreach Centers, and local Chambers of Commerce. For the nearest offices, visit: https://www.sba.gov/local-assistance

SEDA-Council of Governments (SEDA-COG) can help direct and offer guidance to central Pennsylvania businesses. Please contact Doug Wilburn, director of Business Finance, at 570-524-4491 or dwilburn@seda-cog.org.

Businesses may also contact their local county resources, as well as the Pennsylvania Department of Community and Economic Development’s Pennsylvania Business One-Stop Shop at business.dced@pa.gov or call 1-833-722-6778, option 0.

These SBA loans now have relaxed criteria as part of the Trump Administration’s aggressive, whole-of-government efforts to combat the coronavirus outbreak (COVID-19) and minimize economic disruption to the nation’s 30 million small businesses.

The relaxed criteria will have two immediate impacts:

• Faster, Easier Qualification Process for States Seeking SBA Disaster Assistance. Historically, the SBA has required that any state or territory impacted by disaster provide documentation certifying that at least five small businesses have suffered substantial economic injury as a result of a disaster, with at least one business located in each declared county/parish. Under the just-released, revised criteria, states or territories are only required to certify that at least five small businesses within the state/territory have suffered substantial economic injury, regardless of where those businesses are located.

• Expanded, Statewide Access to SBA Disaster Assistance Loans for Small Businesses. SBA disaster assistance loans are typically only available to small businesses within counties identified as disaster areas by a Governor. Under the revised criteria issued today, disaster assistance loans will be available statewide following an economic injury declaration. This will apply to current and future disaster assistance declarations related to coronavirus.

“We’re very encouraged that banks and financial institutions are responding to the President’s efforts to mobilize an unprecedented public-private response to the Coronavirus (COVID-19) outbreak. As a result, most small businesses that need credit during these uncertain times will be able to obtain it. However, our goal is to ensure that credit is available to any and all small businesses that need credit but are unable to access it on reasonable terms through traditional lending channels,” said Administrator Carranza. “To that end, the SBA is relaxing the criteria through which states or territories may formally request an economic injury declaration, effective immediately. Furthermore, once an economic injury declaration has been made in a state or territory, the new rules allow the affected small businesses within the state or territory to apply for a disaster assistance loan.”

SBA’s Economic Injury Disaster Loans are just one piece of the expanded focus of the federal government’s coordinated response, and the SBA is strongly committed to providing the most effective and customer-focused response possible.

Glass House Inn has new ownership thanks to SEDA-COG financing

ERIE – The Glass House Inn is under new ownership, thanks to a loan partnership with SEDA-Council of Governments (SEDA-COG) and Northwest Bank.  

Nigam Bhavsar bought the motel at 3202 W. 26St. from the prior third-generation owners with this financing. The inn had previously been updated including the carpeting, mattresses, and 32-inch TVs in each room, along with offering free Wi-Fi. The inn also has a well-maintained outdoor pool.  

As a result of the project, two full-time jobs will be created.  

The loans through SEDA-COG offered the low interest rates and long terms Bhavsar needed to make his business endeavor successful.  

The $281,700 Small Business Administration (SBA) 504 loan offered a fixed 20-year low interest rate, and the $60,000 SEDA-COG TEAM loan also had the benefit of a fixed low interest rate.  

Bhavsar said John Reichard, SEDA-COG senior relationship manager, was helpful throughout the process.  

“Everyone at SEDA-COG was very responsive and professional when answering all my questions. John Reichard was very knowledgeable with the SBA 504 program and walked me through the details of the program,” Bhavsar said.  

Northwest Bank partnered with SEDA-COG on the project with most of the financing.  

Paul Kruszewski, Northwest Bank business banker, said the partnership made for a “winning solution” for the borrower.  

“SEDA-COG was instrumental in providing a financing solution for Dattam Hospitality LLC (Nigam Bhavsar). By offering an attractive rate and borrower-friendly terms, Northwest and SEDA-COG provided a winning solution to our borrower,” Kruszewski said. “The staff at SEDA-COG was very timely and informative, allowing for an easy loan approval process. I look forward to partnering with John Reichard and SEDA-COG on future opportunities.”  

For more information about the Glass House Inn, visit www.glasshouseinn.com.  

To start a financing partnership with SEDA-COG, call 1-800-332-6701 and ask for the Business Finance department or email John Reichard at jreichard@seda-cog.org.  

Northwest Bank is a full-service financial institution that offers a complete line of personal and business banking products, loans, investment management, trust and insurance services and employee benefits from 172 full-service locations across Pennsylvania, New York, and Ohio. Northwest Bancshares Inc. is the holding company of Northwest Bank and is listed on the NASDAQ Global Select Market as NWBI. For more information, visit www.northwest.com.  

SEDA-COG’s Business Finance Department serves the entire state of Pennsylvania for the SBA 504 program. For Pennsylvania Industrial Development Authority (PIDA) and SEDA-COG loans, SEDA-COG serves 11 central Pennsylvania counties: Centre, Clinton, Columbia, Juniata, Lycoming, Mifflin, Montour, Northumberland, Perry, Snyder, and Union.

Small business loan program hits record-low interest rate

Good news for new or expanding businesses – a federal loan program’s interest rate is the lowest in the program’s history.

The Small Business Administration (SBA) 504 loan program’s 20-year effective fixed rate for June is 3.98%, the first time it has fallen below 4%. Rates for other term options are also at or near recent lows. The rates have decreased for the past six months and have been below Prime for seven months. Rates are set monthly for loans that have closed the previous month.

SEDA-Council of Governments (SEDA-COG) partners with banks to offer businesses statewide this long-term, fixed-rate financing that can be used to acquire fixed assets for expansion or modernization or to refinance existing real estate or equipment debt. SBA 504 loans can be as small as $100,000 up to $5 million (in some cases $5.5 million).

Benefits of SBA 504 loans:

Long-term, fixed-rate financing (10 years for equipment and 20 or 25 years for real estate)

Lower down-payment vs. conventional financing (as low as 10% for existing businesses)

Financing up to 40% of eligible costs (land and building purchase, building construction, building renovations, equipment, refinancing of real estate or equipment debt)

Loan is fully amortized (no balloon payment)

Reduces risk for the partnering lender

For-profit businesses with a net worth less than $15 million and net income less than $5 million may be eligible. For real estate financing, the business must occupy a majority of the space.

John Reichard, SEDA-COG senior relationship manager, said the SBA 504 loan program is a proven success and win-win-win for the small business, the community and participating lenders.

“Businesses tell us again and again how the SBA 504 low interest rates and long terms help with cash flow and empower them to expand when it otherwise might have been difficult,” Reichard said. “This in turn promotes economic development in our communities.”

SEDA-COG provides SBA 504 loans throughout the state of Pennsylvania. For more information, visit www.sedacogldc.org or call 570-524-4491 and ask for the Business Finance Department.