Financing in the Marcellus: Plenty of help available for small businesses

Posted April 16, 2012

“Financing in the Marcellus”

Pennsylvania State Financing Programs

 

By:  Pat McCune

President of Community Bank

April 9, 2012

 

            Here we are in an “energy boom”.  Who would have thought that little Washington and Greene Counties would become one of the most explosive economic markets in the nation?  So, if you have a small business, how do you participate?  How can you round up the money to expand your business?  How can you tap into reliable advice about best practices to succeed?  Fortunately, there are an almost unlimited number of experts waiting to help you.

 

            I am always amazed at how many programs exist to help small business.  For example, on the web site of the Pennsylvania Department of Community and Economic Development, one can find dozens of programs, all designed to get money and advice to expanding businesses.  And DCED is but one of dozens of organizations waiting to help.  The real problem is how to decipher the maze of service providers so as to access these programs. 

 

            This is the first of four articles on “Financing in the Marcellus”.  I hope to shed some light on how local businesses can leverage the considerable resources available so that they can grow with the Marcellus.  In order to answer your questions, we will hold one or more companion seminars featuring knowledgeable speakers on the same topics.  This article will focus on programs offered by the Commonwealth of Pennsylvania.

 

            Pennsylvania offers its loan and grant programs through the Department of Community and Economic Development (“DCED”).  Their website is www.newpa.com.  The following is a sample of the various Pennsylvania loan and/or grant programs of interest to local businesses.

 

Program

Purpose

Amount Available

Remarks

Community Economic Development Loan

Low interest loans for small business in distressed areas

Up to $100,000

Land, buildings, machinery, and equipment

Guaranteed Free Training Program

(GFT-WEDnetPA)        

Basic skills and information technology training for eligible employees of new and expanding businesses.

Basic Skills Training: Up to $450 per trainee and $75,000 per company.

 

Basic Skills Training: PA Manufacturing and Technology-based businesses

 

Job Creation Tax Credits (JCTC)

Tax credits used to offset various business tax liabilities

 

$1,000-per-job tax credit to approved businesses that agree to create jobs within three years;

 

Tax credits may not be utilized by a business until the jobs are actually created; Must create at least 25 new jobs or expand the existing workforce by at least 20%.

Machinery & Equipment Loan Fund

Providing machinery and equipment funding to wide variety of activities

Up to $5 Million

New or used machinery

Pennsylvania First

Grants, loans, and guarantees for land, buildings, working capital, machinery and equipment

Varies

Businesses which will create or preserve a significant number of jobs and will make a significant investment within the Commonwealth 

PennCAP

Loan guarantees to small business through local bank loans

$500,000 maximum

Purchase land and buildings, machinery and equipment

Small Business First

Funding for small businesses, including: low-interest loan financing for land and building acquisition and construction; machinery and equipment purchases and working capital.

 

Loans up to $200,000 or 50% of total eligible project costs, whichever is less; Maximum loan amount for working capital is $100,000 or 50% of total eligible project costs, whichever is less

 

A for-profit small business (100 full-time employees or less) which are: Manufacturing: Industrial; Agricultural enterprises; Research and development; Construction, computer-related services; Hotels, motels, or restaurants; Municipal or commercial recyclers; Defense-related; Child day-care

 

 


 

            Over and above these representative programs, the Washington County Chamber of Commerce administers three important state programs as follows.

 

PEDFA

Tax Exempt and Taxable Bonds for manufacturing, energy, and waste disposal

$400,000 to $10 Million

Tax exempt financing for land, buildings, machinery, and working capital

PIDA

Low interest loan financing through Industrial Development Corporation

Up to $2 Million

Job creation and retention loans for a wide variety of industries

L-TEN Loans

Tax exempt financing for manufacturing, waste disposal, water facilities and Non-profits

$400,000 to $10 Million

Requires a local bank;  terms negotiated

 

           

 

We are fortunate in Washington and Greene Counties in that we have a well developed economic development infrastructure.  The following organizations have experts that work with these programs every day. 

 

Organization

Remarks

Greene County Industrial Developments, Inc.;

www.gcidc.org

This is Greene County’s private economic development council.  They own and offer sites at the Evergreen Industrial Park in Waynesburg.

Greene County Industrial Development Authority;

www.co.greene.pa.us

The GCIDA provides "one-stop shopping" for manufacturing and distribution investors interested in site locations. It offers PIDA loans, MELF loans, and conventional financing. The authority currently has two industrial parks.

Middle Monongahela Industrial Development Association; www.mmida.com

MIDA has created several successful industrial parks and currently owns and offers the Alta Vista business park in Bentleyville, Washington County, Pa.

Mon Valley Progress Council; www.monvalleyprogress.org

Private group that advocates for the Mon Valley Expressway and assists local companies with technical, financial, and site location issues.

Southpointe CEO Association;

www.southpointe-ceo.org

A private nonprofit business support and promotion group located in and focused on Southpointe, a prominent business part south of Pittsburgh and home to many energy companies.

Redevelopment Authority of Washington County www.racw.net

 

This is a large and important economic development agency in Washington County.  They were responsible for the development of Southpointe.  They administer a large number of programs of value to business.  A must stop.

Washington County Authority

 

The Washington County Authority is a quasi governmental agency that owns and administers certain real estate projects.  It owns and is developing “Southpointe II”.

Washington County Chamber of Commerce;

www.washcochamber.com

The premier chamber south of Pittsburgh.  They are involved in every aspect of economic and business development.  A must join for aspiring businesses in Washington County.

Washington County Council on Economic Development ;

www.washingtoncountypa.org

A private economic development organization offering various services.  WCCED owns and offers the Starpointe Business Park, a huge light industry park in northwestern Washington County.

Washington County Economic Development Partnership; www.washingtoncountyworks.com

 

This is a public/private partnership among the Washington County Commissioners, Washington County Chamber of Commerce, Washington Industrial Development Corporation and the Washington County Industrial Development Authority.  A one-stop shop for those seeking to do business in Washington County.  It also administers a variety of financing programs through its affiliates WIDC and WCIDA.

Washington County Energy Partners;

www.EnergyCapitalOnline.com

A Washington County consortium of leading economic development organizations, elected officials, and private companies dedicated to bringing energy related economic development to Washington County.

Washington County Industrial Development Authority; www.washingtoncountyworks.com

WCIDA is an authority established to provide economic development incentives for businesses in expanding in Washington County.  It provides tax exempt financing and taxable bonds. WCIDA is administered by the Washington County Chamber of Commerce.

Washington Industrial Development Corporation; www.washingtoncountyworks.com

WIDC provides low interest loans for construction that adds jobs.  Financing provided by the State.  WIDC is administered by the Washington County Chamber of Commerce.

Waynesburg Chamber of Commerce; www.

waynesburgchamber.com

 

This is the most active chamber in Greene County, located in Waynesburg, the county seat of Greene County.

 

 

For our next article, we will talk about regional economic development programs, such as the Southwest Pennsylvania Commission and the Catalyst Connection.  In a later article , we will talk about more local programs, such as those offered by the Washington County Council on Economic Development and Bridgeway Capital. 

 

Please feel free to contact meif you have questions.  Watch for our companion seminars as we attempt to help our local businesses succeed in the Marcellus.