Financing In The Marcellus: Local financing programs

Posted May 29, 2012

By Pat McCune
President of Community Bank

This is the third of four articles about how to finance your small business and take advantage of the incredible opportunities available because of the Marcellus Shale boom. My first article addressed Pennsylvania State financing programs.

If you read my previous two articles, you know that local business people have an incredible array of resources available to help them succeed. While those articles covered statewide and regional programs, we have special programs in place right here.

One leading local organization is the venerable Washington County Council On Economic Development . It was founded 23 years ago to provide comprehensive economic development services to Washington County and surrounding areas. WCCED owns the Starpointe Industrial Park near Burgettstown and offers several popular loan programs.

Its bread and butter is its "SBA Microloan Program." These loans are small and are available to entrepreneurs in Washington, Greene, or Fayette counties and also throughout northern West Virginia. Loan amounts can be as small as $5,000 or as large as $50,000. A local loan review committee makes decisions and tailors applications to the borrower's needs. These microloans can be for almost anything, including opening a business or supplementing working capital. WCCED has completed more than 220 of these loans. The microloan program is really one of the most flexible and valuable of the local loan programs, and again is an initiative of the SBA.

WCCED also has a variety of funding sources that allow it to offer secondary financing (taking a second lien after your own bank). These funding sources include the Department of Agriculture, USDA Rural Development, Community Development Financial Institutions, the Pennsylvania DCED, the Appalachian Regional Commission and WCCED's own GAP loan fund. These "participation" loans can be up to $100,000 and can be up to 40 percent of a project. The loan term can be up to 10 years and the interest rate is fixed. WCCED has more than 130 of these participation loans. There are, of course, requirements to show job creation potential and you often must agree to hire low-income residents.

In Pittsburgh, Bridgeway Capital has been busy making hundreds of loans to small businesses over the last 15 years. As explained at its web site, "Bridgeway Capital provides flexible, alternative financing for small businesses and other organizations. We collaborate with lending partners (such as banks and credit unions) to help small businesses receive sufficient financing to be successful. The economic and social impact produced by small businesses combine to create a thriving regional economy for western Pennsylvania." Bridgeway offers several categories of loans as set forth below.

Although not a loan fund, another unique local organization is the Diversity Resource Center, operated by the Riverside Center For Innovation. This organization historically was focused on Pittsburgh's North Side, but recently has expanded into Washington and Greene counties. The Diversity Business provides a single point of contact of minority, women and other disadvantaged business owners who seek information and referrals to start, sustain and grow their businesses in Southwestern Pennsylvania. It seeks to help small, homegrown businesses by providing training and technical assistance. See http:// www.riversidecenterforinnovation. com.

Over and above financing programs, there are an overwhelming number of other organizations that offer advice to small business. Just go to http://www.communitybank.tv and click on the "Business Alliance" button to see more information.

My next article will be about leasing as an alternative to purchasing.

Copyright Observer Publishing Co.