Category: SEDA-COG

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.

New or expanding businesses in Clinton County can apply for fixed low-interest-rate loans that have helped create 1,300 jobs in the county since 1985.

The Clinton County Revolving Loan offers a 3 percent fixed interest rate with terms typically at seven or 10 years.

This frees up cash flow, said Roxanne Greising, director of SEDA-Council of Governments’ (SEDA-COG) Business Finance Department. SEDA-COG reviews these loan applications and makes recommendations to the loan board.

“These are very attractive interest rates that help business owners – they get to keep the money they would’ve paid and use it for working capital, etc.,” Greising said.

The loans usually cover one-third of the project or a $250,000 maximum.

Full Body Health and Fitness Center in Lock Haven previously leveraged a $100,000 Clinton County Economic Development Administration/Revolving Loan Fund (EDA/RLF) loan to purchase their building, converting it from a skating rink to their gym.

The owners, Brian and Lori Hoy, also used two $33,390 loans for equipment: a Clinton County Enterprise Zone loan and a Lock Haven Commercial Loan Program fund.

SEDA-COG, on behalf of the Clinton County Loan Administration Board, partnered with M&T Bank of State College to finance the project.

Because of the nature of the new venture, SEDA-COG’s partnership helped spread the risk for the bank and helped make their dream a reality.

“Without SEDA-COG’s partnership with the project, a bank would not have taken the risk alone to finance our project,” Brian Hoy said.

The revolving loan fund, which is over 30 years old, was started by the county as a final piece of a financing puzzle for any business located in Clinton County.

For more information, contact SEDA-COG’s Roxanne Greising at 570-524-4491 or rgreising@seda-cog.org.