LVEDC: Driving entrepreneurial and small business growth

2010 Annual Investors' Meeting

1/22/10

BETHLEHEM – January 22, 2010 – Creating an environment where small businesses and entrepreneurs will thrive was the primary topic of the Lehigh Valley Economic Development Corporation’s (LVEDC) Annual Investors’ Meeting held Thursday in the Grand Ballroom of The Historic Hotel Bethlehem.

Keynote Speaker Erik Pages, president of EntreWorks Consulting an economic development consulting and policy developmental firm, focused his roughly 30-minute address on the factors needed to create economic development moving forward.

“A region needs a talented workforce with entrepreneurs and the Lehigh Valley certainly has that,” Pages noted. “It also needs to provide a quality of life that is exciting in a good location with a sense of strong civic leadership.”

Mr. Pages encouraged the audience of about 250 people to reconsider their thoughts about successful economic development.
“Our focus should be on talent development and attraction as key missions,” he said. “Openness and diversity are important local assets as is, from an economic development standpoint, building and nurturing entrepreneurial ecosystems.”

“Mr. Pages’ speech was centered on building a pipeline of entrepreneurs and often those entrepreneurs come from colleges and universities,” said LVEDC President and CEO Philip B. Mitman. “That’s perfect for the Lehigh Valley because we have an emerging nucleus of talented young entrepreneurs in our many schools and one of LVEDC’s Strategic Priorities in our Five-Year Plan is to boost innovation and talent, particularly among young professionals.”

The Annual Meeting also featured a report from Mitman on financing projects in Lehigh and Northampton counties during 2009 when LVEDC helped secure more than $21 million for 26 companies that are estimated to create or retain 2,290 positions.

“We are leading the way when it comes to assisting small businesses and companies obtain working capital in a challenging lending environment,” Mr. Mitman said.

LVEDC does this by being the only accredited agency by the Commonwealth of Pennsylvania to administer various financing programs.

Activity at LVEDC continues to be brisk for the SBA 504 Program. The SBA 504 loans provide long-term, fixed-rate financing to small businesses to acquire real estate, machinery or equipment for expansion or modernization. Typically a 504 project includes a loan secured from a private-sector lender with a senior lien, a loan secured from the SBA with a junior lien covering up to 40 percent of the total cost, and a contribution of at least 10 percent equity from the borrower.

Borrowers of the SBA 504 enjoy 10% down payment (15% for start ups), a low fixed interest rate on SBA portion and a 20-year term.  Almost all for-profit businesses are eligible to apply.  Funds can be used for purchase of land, building, new construction, building renovations & associated soft cost (Term 20 years). Funds can also be used for machinery and equipment (Terms of 10 or 20 years depending on life of asset).  The SBA 504 program will not finance inventory, accounts receivables or working capital.

Borrowers aren’t the only ones who reap the benefits of the SBA Loan program. Banks who are the primary lender are listed as the first position on assets being purchased; they retain the deposit accounts and receive Community Reinvestment Act (CRA) credits.

The PIDA program is considered by many lenders to be Pennsylvania’s flagship economic development financing program. Established in 1956, the PIDA program provides low-interest loans for funding land and building acquisition, building construction and renovation for manufacturing, industrial and other eligible companies. The program can finance up to $2,250,000 and carries a fixed interest rate of 3.75 percent with a term up to 15-years.

The Lehigh Valley Loan Pool (LVLP) is another tool LVEDC uses to put cash on the street for qualified businesses. During 2009 it assisted two businesses with a total of $4.7 million who sought to locate or expand their businesses within the Lehigh Valley. The LVLP is designed to assist and foster the development and improvement of businesses in the cities of Allentown, Bethlehem and Easton.  It requires an initial participant commitment of $250,000. The LVLP consists of 12 participants – 11 financial institutions and Lehigh University – and is administered by LVEDC.

And LVEDC’s new logo was unveiled. Designed by Spark Creative, the color scheme of dark blue represents balance and urban growth while the light green designates sustainable development. The flame-like slashes begin separately and morph at the apex of the logo as a symbol that represents the interconnectedness, openness and collaboration that is inherent in LVEDC and the Lehigh Valley.

The Annual Meeting also saw a retrospective on the career of Robert Wendt, who served 12 years as LVEDC’s administrator of the Pennsylvania Business Retention and Expansion Program (BREP) and as Director of Research. Mr. Wendt announced his retirement Oct. 1, 2009 as an active full-time employee with the organization.

Prior to the Annual Investors’ Meeting, the LVEDC Board of Directors Meeting was held in the Moravian Room of The Hotel Bethlehem.

For more information, please contact Stephen Althouse at 610.266.3817 or salthouse@lehighvalley.org.

Lehigh Valley Economic Development Corporation (LVEDC) is a one-stop, full-service business and economic development agency. Created to promote and foster economic prosperity in the Lehigh Valley, LVEDC assists businesses by providing them with regional, economic and demographic information, finance and business incentives, site and facility availability, business networking, and workforce services. By coordinating with state, county, and municipal governments, chambers of commerce, industry organizations, educational institutions and utilities, the award-winning LVEDC streamlines the relocation and expansion process for businesses. Visit LVEDC online at www.lehighvalley.org.