History of the Finance Program
A study conducted in the early 1980s pointed out that many firms in our region, particularly smaller firms, failed to present valid financing needs in an effective way to the private capital market. The study also indicated that capital is consistently more difficult to obtain in rural areas. Through the efforts of the SEDA Foundation, SEDA-COG was able to offer Appalachian Regional Commission and Economic Development Administration loans to small businesses in the region. SEDA-COG soon became a designated Small Business Administration Local Development Corporation which enabled us to offer the Small Business Administration 504 program to companies in our region. Over the years, we have expanded the number of available loan programs to better serve the needs of Central Pennsylvania businesses. As of December 2013, SEDA-COG has approved over 875 loans for over $215 million, and as a result, those companies have created over 10,500 jobs.
Financing your business project
SEDA-COG can provide partial financing for your business project, whether you're expanding the company, or starting a new one. We offer several financing programs and, depending on the one that's right for you, you may be eligible for as little as $25,000 or as much as $5,000,000.
Our loans are generally for asset acquisition - land, capital expenditures, machinery, buildings, and equipment. Loans for working capital are available on a limited basis. Our financing programs are primarily for manufacturers and industrial enterprises, although there are a limited number for retail and service companies.
Qualified borrowers can secure up to 50% of the financing they need, depending on the program. The rest may be provided by area banks, company equity, or other private financing. Our loans supplement private financing. We don't replace it.
Your project may be eligible for a SEDA-COG loan
Your company is special, with its own unique characteristics. That's the same approach we'll take with your loan application. Basically we're looking for companies with a good cash flow, a positive net worth, and a record of profitability for the last three years.
Credit analyses are done on an individual basis, case-by-case, and our financial analysts can help you determine your company's credit worthiness.
Job creation and retention are an important criteria for our loans. Will your project create new jobs, or retain existing employment? Five, six, or 70 jobs -- every job is important. Loans through SEDA-COG have assisted in creating over 10,500 jobs.
SEDA-COG offers fixed-rate, long-term financing, at interest rates that are generally lower-than-market. Currently, rates range from 2% to under 6%. The rate is often based on legislation, a percentage of the New York Prime, or may be based on the sale of U.S. Treasury Bonds.
Terms also vary, depending on the program and the asset being financed. Generally you'll have five to 10 years to repay your loan, or up to 15 or 20 years for some land and building projects.
You may also benefit from creative financing opportunities, available through SEDA-COG. Our professional staff, with its background in banking and industry, knows the public and private financing sources that are available, and we can identify those that are most appropriate to your needs. We know their requirements in terms of lien position, owner's equity, and administrative procedures. We know which financing sources work best with one another and we're willing to take a junior position to help pull together the financing package for your project.
The SEDA-COG Advantage
Fixed-rate financing. Long terms. An ability to bring you together with additional sources of business financing. These qualities, combined with our expertise will add to the affordability of your business expansion or start-up.
A wide range of management-related services can also be provided to your firm. Our programs are designed to supplement, not replace, private capital from banks and other lending institutions. By taking a subordinate position, SEDA-COG can spread the risk of your project among several sources, making it more attractive for private financing. We want to be your partners in creating and retaining jobs, while strengthening Central Pennsylvania's economy.
Many business expansion projects today utilize private and public sources of investment capital. SEDA-COG can help your firm do the same thing. Financial analysis will be completed to determine the feasibility of your proposal. SEDA-COG can also provide marketing assistance for your business. SEDA-COG can direct you to other service providers who can help you complete your business plan and present it to local banks, many of which have already participated with SEDA-COG on other projects. Working with you, we will identify the appropriate public and private funding resources for your proposal.
The application process is clear and straightforward. We'll work hand-in-hand with you, making sure the T's are crossed and the I's are dotted. If necessary we'll help you with forms, phone calls, and letters. You provide the information; we'll make sure the process is handled correctly and as quickly as possible.
How a project through SEDA-COG works
The full range of SEDA-COG's financing programs are available to firms in the following counties of Pennsylvania:
SEDA-COG can offer the Small Business Administration 504 Program and the USDA Business & Industry Loan Guaranty Program throughout the entire State of Pennsylvania.