WCCED helps small businesses get loans
The budget crisis that was shutting down state offices at the time was threatening Sonya Cialone's small business in Donora.
That's when Cialone and her mother/business partner, Mary Jo Garbart, turned to the Washington County Council on Economic Development for help.
Through the assistance of April Cacia, loan officer for the WCCED, the operators of Sonya's Enchanted Garden Daycare, 415 McKean Ave., Donora, received a Small Business Administration microloan.
“Through the loan program, we were able to get through the state budget crisis,” Cialone said. “We are 90 percent state subsidized. The loan provided funding to keep us open until the budget was passed.
“It would have been very difficult to remain open without that loan.”
The Small Business Administration microloans range from $5,000 to $50,000. WCCED is an intermediary between the SBA and small businesses for the loan program for companies in Washington, Greene, Fayette, Westmoreland, Allegheny and Beaver counties.
The microloan program helps new and expanding small businesses. Microloans carry an interest rate of 6.5 to 8.5 percent for up to six years. The loans can be used to buy inventory, purchase equipment and supplement working capital.
WCCED is the largest microloan provider in western Pennsylvania and West Virginia. During the most recent federal fiscal year — Oct. 1, 2012, to Sept. 30, 2013 — 46 loans were closed in that region totaling $1,440,440. WCCED closed 21 of those loans for $747,304, said Dan Reitz, executive director of the organization.
“We partner with almost anyone to get our word out,” Reitz said. “We partner with a lot of the chambers in the area.
“We are a member of five chambers in West Virginia and four in Pennsylvania.”
It is just one of two loan programs that the WCCED oversees. The other is a Participation Loan, whose programs come from a number of financing sources:
• The United States Department of Agriculture.
• USDA Rural Development.
• U.S. Department of Treasury, Community Development Financial Institution.
• Pennsylvania Department of Community and Economic Development.
• The Appalachian Regional Commission
• The WCCED GAP Loan Fund.
Participation Loan funds provide gap financing up to 40 percent of the total project costs, not to exceed $100,000. Loans are provided at 1 percent above the prime rate and fixed for up to 10 years.
These loans can be used for purchasing inventory, acquiring fixed assets, business acquisition, real estate acquisition, construction, repair or modernization, leasehold improvements or working capital.
WCCED closed on five Participation Loans totaling $328,000 in the most recent fiscal year.
Reitz said demand for these loans is up, adding that his organization's outreach appears to be working. He said the WCCED works with Pennsylvania CareerLink to help firms receiving these loans meet a goal of providing at least 30 percent job creation among low-income residents.
“Most of the loans we make are in lower-income communities,” Reitz said. “That's why these programs are so valuable to the Valley. We've actually made a lot of loans, small and large, in the Valley.”
Sonya's Enchanted Garden Daycare also utilized a Participation Loan to move into a larger facility that can serve more than 60 children. Reitz said daycare facilities are eligible for the loan programs because they serve ancillary functions to the local economy.
Channel Craft in North Charleroi utilized the Participation Loan program to renovate its facility so that equipment and supplies could be elevated to provide protection in the event of flooding. A microloan was used to purchase equipment that aided in the packing of product for shipping.
Chris Buckley is a staff writer for Trib Total Media. He can be reached at 724-684-2642 or firstname.lastname@example.org.