Redevelopment group launches small business loan program | New
The Meadville Redevelopment Authority will soon provide loans of up to $ 25,000 to small retail and service businesses in Crawford County affected by the COVID-19 pandemic.
The board members voted unanimously to go ahead with a working capital loan fund of $ 500,000. The fund had previously been approved in April, but the authority needed permission from the Pennsylvania Department of Community and Economic Development (DCED) to reuse funds from another loan program.
“We’re thrilled to have the money to help local retailers and service people,” said Dennis Frampton, chairman of the authority. The authority’s hopes of rolling out the program more quickly have been hampered by rules governing the French Creek Valley Corporate Zone Revolving Loan Fund, which previously existed, he added.
“We had to do advocacy with the state,” Frampton said. “We are very happy that we were able to do it and we hope to be able to help some people.”
DCED had originally provided the funds that financed the French Creek Valley Enterprise Zone Revolving Loan Fund. He approved the authority’s request to end the program, which dates back to the 1980s, on June 29, according to Maryann Menanno, the city’s director of community development.
Menanno warned that it will take some time for the loan program to be operational. Apps are under development and should be available in the coming weeks, she said. If all goes well, the authority will review the requests at a meeting in the last week of August.
The authority hopes to target small businesses that have not benefited from other COVID-19 relief programs. Menanno said, but having received state or federal assistance through another program does not automatically disqualify applicants. Businesses that receive loans under the program must retain at least 50% of their workforce as of July 1.
To be eligible for loans, businesses must be for-profit entities with fewer than 25 employees. Eligible costs include capital used by businesses for operations; fixed assets, machinery and production equipment are excluded.
Three-year loans carry an interest rate of 1%. No interest or principal payment is required during the first 90 days of the term. For the second 90-day period, loan recipients are only required to pay interest. Standard interest and principal payments begin after 180 days.
“It’s very exciting,” Menanno said of the program. “We hope it can make a difference.”
The decision to provide loans to businesses across the county, rather than just in the city, was in keeping with the spirit of the French Creek Valley Enterprise Zone Revolving Loan Fund that provided the money. Sixty percent of the $ 500,000 fund will go to city businesses; the remaining 40% will be made available to businesses in the rest of the county, Menanno said.
The now defunct Enterprise Zone revolving loan fund targeted the manufacturing sector along French Creek in the town and northward and extending into Vernon Township along the Highway 322 corridor. program has been successful, with loans typically of $ 250,000 distributed and repaid multiple times, the decline of manufacturing in the region has led to less frequent use, according to Menanno.
The last loan approved through the fund went to Peters’ Heat Treating Inc., Menanno said, and helped relocate the company from its Race Street location to a new facility in West Mead Township. Approximately $ 900,000 of loans under the program remain unpaid.
Mike Crowley can be reached at 724-6370 or by email at [email protected].