A clear preemption to offer a new revolving loan fund

CLEARFIELD – Clearly Ahead Development was awarded $1,122,500 in September by the Pennsylvania Regional Socio-Economic Development Agency.

The funds were made available through the State Small Business Credit Initiative funded by the U.S. Relief Plans Act to establish a new revolving loan fund.

Loans from the fund are designed to provide low-cost, flexible financing that can be used to fund startups and small businesses in Clearfield County, said the Clearfield County Commissioner on Tuesday. At the conference, Clearly Ahead CEO Rob Swales said:

The focus will be on COVID-affected and economically depressed neighborhoods owned by disadvantaged, minority-owned, socially and economically disadvantaged individuals.

Projects will be prioritized based on stimulating business activation and growth, diversifying the local economy, strengthening supply chains and creating/sustaining jobs, Swales said.

Eligible applicants are:

  • New or existing commercial business.
  • Businesses and projects located in Clearfield County.
  • Any person with substantial U.S. citizenship or lawful resident ownership;When
  • Persons with no past due debts or previous losses to the federal government, bankruptcies in the last 10 years, appealed judgments, tax liens, or active collections.

Eligible uses include:

  • Purchase, construction, renovation, or tenancy improvement of a qualifying business establishment that is not for passive real estate investment purposes.
  • mechanical equipment;
  • working capital;
  • automation projects;
  • start-up costs;
  • franchise fee;
  • inventory; and
  • A service used to produce, manufacture, or deliver goods or services for a business.

Excluded uses include:

  • refinancing of existing debt;
  • real estate investment property;
  • A project that is speculative in nature.
  • Purchase of goodwill when acquiring a business.
  • Repayment of delinquent withholding taxes or other funds that should be held in trust or escrow.
  • gambling activities; and
  • illegal activity.

The repayment conditions are as follows.

  • Land/Buildingfor a maximum ten-year term.
  • mechanical equipment, for a maximum term of seven years.When
  • working capitalfor a maximum term of three years.

loan amount

Swales said the loan request should not exceed 50% of the total cost of the project or $100,000, whichever is less.

Loan requests under $50,000 are considered “Micro Loans” and are subject to the terms, conditions and interest rates set by the Loan Review Board on a case-by-case basis.

According to Swales, CAD funding will not be the sole source of funding for the project.

Funds from CAD programs must be utilized at least one-for-one with other nonstate/nonfederal loan funds or private loan funds.

A cash/stock contribution from the borrower does not constitute adequate leverage.

degree of interest

Swales said interest rates are determined based on the loan’s purpose, term, collateral and associated credit risk.

commission

  • There is an origination fee of 1% of the loan amount, which is charged to the borrower at closing.
  • Borrowers are responsible for the costs of preparing documents charged by Clearly Ahead’s attorneys, UCC application fees, mortgage records, and other costs incurred during the life of the loan, including continuation/termination of CC and mortgage satisfaction. Be responsible.
  • A non-refundable application fee equal to one-half one percent (.5 percent) of the requested loan amount or $250, whichever is higher, will be collected from the borrower at the time of the initial application. The application fee will be applied as a credit against closing costs at the time of loan closing.
  • There is no early repayment penalty.

Document requirements

  • cash flow: Historical or projected cash flows must be sufficient to service new and existing debt.
  • Credit history: A business must have a satisfactory history of paying its debts in a timely manner. Business owners must have a reasonable and responsible personal credit history.
  • management: A company must have experienced managers to run a successful business.
  • collateral: Loan amounts greater than $10,000 require the highest available collateral on the loaned property and/or existing property. Additional collateral may be required.
  • guarantee: All loans must have a personal/corporate guarantee of an owner/shareholder with 20% or more ownership interest in the business.
  • insurance: Risk insurance is required for secured assets.

How to apply

Interested applicants should contact Clearly Ahead staff to discuss the project and determine eligibility, Swales said.

For more information or to discuss a project, please contact Swales at 814-768-7838, ext. 202, rswales@ClearlyAhead.com, or Paul McCloskey, Vice President, Energy and Business Development, 814-768-7868, ext. 205, pmccloskey@ClearlyAhead.com.

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