LDC Board Chairman, Mayor Jack Diamond, above, heads an all-volunteer board. LDC has loaned more than $3.5 million to local businesses, according to Director Ed Bartholomew.
By Jill Nagy
The first loans from a new federally-funded grant fund will be awarded in the next few weeks, according to Ed Bartholomew, Director of the Greater Glens Falls Local Development Corporation (LDC). A total of $250,000 is available for existing and start-up businesses that will create new jobs. The grant is from the Rural Development Agency, part of the U.S. Department of Agriculture.
This new program, formally known as the USDA Intermediary Relending Program, brings to more than $800,000 the total amount available through the LDC’s various loan programs. Since the LDC was created in 1984, more than $3.5 million has been lent and repaid, Bartholomew said. More than 90 percent of the money lent is repaid, he estimated, and available to be lent again to someone else.
Loans under the new program are intended to be part of a larger financing package. “This is not intended as primary funding except in the case of a small start-up,” he said. In fact, one of the requirements for a loan is a good relationship with a banking institution. Applicants also need a viable business plan.
The LDC can assist businesses in arranging other financing, such as Small Business Agency loans. In addition, LDC will refer business owners to programs and courses that can help them create and operate their businesses. Bartholomew mentioned two sources: SCORE, an organization of retired business executives who are “very helpful in working with applicants, for example, in developing a business plan,” and SUNY at Adirondack that offers five- or six-week courses in topics such as insurance, liability, developing a business plan.
Typically, interest rates will be in the 4-5 percent range. While the LDC currently provides “micro-loans” of $10,000 or less and “macro-loans” ranging from $10,000 to $50,000, the USDA-funded loans are expected to be in the $50-70,000 range.
Use of the loan money should result in the creation of new jobs. For a $50,000 loan, for example, an applicant must demonstrate that it will add at least five new jobs.
So far, four or five different parties have applied for loans, Bartholomew said, including a retail operation, a marketing business, and a manufacturer looking to expand its operations. They include both existing businesses and start-ups. Local processing is expected to be completed later this month. Then, the applications will be forwarded to USDA, and decisions from that agency are expected a few weeks later.
An appropriate ceremony will accompany the award of the first checks.
Loans are available for the purchase of capital equipment, renovations or additions to existing buildings, acquisition or construction of buildings, purchase of inventory, or for working capital. A loan may be for as short a period as two years for inventory or working capital up to 10 or 15 years or more for construction or purchase of buildings.
Applicants must be current on their real property taxes, mortgage payments, federal and state taxes, and all other debts. Revolving credit, such as credit card debt, must be of “a manageable size and be receiving sufficient payments,” the requirements state. Unsatisfied judgments are a no-no as are any other claims that might interfere with the lender’s rights to collateral.
In most cases, loans are secured by land, buildings, equipment, or other assets of the business and/or its owners. “Realistically, the loans may have to take a subordinate position to other private lenders, which is acceptable if conditions and circumstances so warrant,” according to the LDC’s webpage.
The requirements further include:
* Evidence that costs, both capital and operating, are reasonable.
* A reasonable, well thought out business plan.
* Appropriate management and financial accounting capabilities are in place.
* A market for the proposed products/services exists, and that a reasonable marketing plan is in place.
* Revenue estimates that are reasonable and that all sources of project funds, other than that from the Revolving Loan Fund, are firmly committed or can reasonably be expected to be committed prior to the loan closing.
“The GGFLDC will look at personal financial statements; project capital cost estimates; equipment quotes; working capital needs; projection of income operating expenses; cash flow and net profit before depreciation and taxes; job projections; evidence of equity and other firm financial commitments.”
There is an application fee of $250, plus some legal and accounting fees and disbursements.
The Greater Glens Falls Local Development Corporation is a low-overhead operation. It is overseen by a volunteer board headed by Mayor Jack Diamond and has no staff of its own but does pay fees to an attorney, Matt Fuller, and an accountant, Tom Ross. Bartholomew directs the LDC but derives his salary from his position as the city’s economic development director.
Board members are a varied and impressive lot: Mayor Diamond as chair; Todd Feigenbaum, a local business owner, as vice chair; Lois Robinson, director of sales for the Lake George Steamboat Co., as treasurer; Judy Calogero, a housing consultant and former New York State Commissioner of Housing and Community Renewal, as secretary; Roy Thomas, president of the local NAACP chapter and a former Community Development Director; Dan Hall, a city councilman and local business owner; and Dan Girard, a business owner, Glens Falls fireman and a member of the Warren County Board of Supervisors, representing a ward of the City of Glens Falls.
The CEO himself, Ed Bartholomew, served as mayor of Glens Falls from 1978 to 1985. After a stint in Albany, as a State Senate staffer and with the Department of Motor Vehicles, he assumed his present posts in 2010. “I’m glad to be back in Glens Falls,” he asserted.
In addition to its loan programs, the Greater Glens Falls Local Development Corporation sees its mission as the education of the local business community, Bartholomew said. They offer business seminars on such topics as how to do business with state and federal government agencies; they summon state legislators to discuss the state budget; and, in May, the agency will sponsor a job fair at the Glens Falls Business Center.
At least partly as a result of the LDC’s efforts, Glens Falls is in better financial shape than the state at large. Bartholomew estimates regional unemployment at 8 percent or less, “and it would be lower if we had had any snow last winter and I am optimistic about going into the next season.” The economy is largely tourist-based; however, Glens Falls Hospital is the largest employer with 2,900 employees.
To reach Ed Bartholomew, call 761-3833, or visit the website: www.glensfallsldc.com.