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Program links banks with small businesses seeking loans

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PHOTO/STACY WESCOE
Mark Vasilantone of Vastex International soon will move his company and its 35 employees to a new home, thanks to a loan facilitated by the Lehigh Valley Lending Network.
PHOTO/STACY WESCOE Mark Vasilantone of Vastex International soon will move his company and its 35 employees to a new home, thanks to a loan facilitated by the Lehigh Valley Lending Network.

When Mark Vasilantone, owner of Vastex International Inc., was looking for funding to expand his business, he turned to Lehigh Valley Lending Network.

Now, the Allentown screen-printing equipment manufacturer is set to move this fall to a new building along Bethlehem’s busy Route 412 corridor.

“I would be lost without John [Kingsley] and the lending network,” Vasilantone said. “He was completely invaluable, and because of [the network] it was my least amount of headache during the lending process.”

Vasilantone, who has 35 employees, said that the network simplified the task of acquiring a small-business loan to build a manufacturing facility. The equipment maker said in total he is borrowing $3.3 million for his project. The Lehigh Valley Lending Network and network official Kingsley helped him obtain state grants through Northampton County and funding from the Pennsylvania Industrial Development Authority.

Vasilantone used his bank, Bank of America, for a portion of the funding. Bank of America is part of the lending network.

IN A TIME OF NEED

The lending network concept spawned from brainstorm sessions in 2010 between the Lehigh Valley Economic Development Corp. and Alan Jennings, executive director of the Community Action Committee of the Lehigh Valley Inc.

It was the Great Recession, and banks were not necessarily providing for their commercial clients’ financial needs.

Today, the network is a partnership between Lehigh Valley Economic Development Corp. in Bethlehem and 17 banks throughout the Valley. The network’s mission is to assist businesses with their financing needs, helping them to find the bank that fits their situation.

TRADITIONAL STANDARDS

The program has helped dozens of businesses since its creation find financing, said Kingsley, vice president of finance for LVEDC and the primary contact for the network.

“All of the businesses we have assisted through the lending network would meet one SBA [Small Business Administration] definition or another as a small business. But many have 50 or more employees, some as high 200 plus,” he said.

“That being said, we are working with companies that meet traditional credit standards for commercial lending – mature, profitable and, in most cases, growing.”

ELIGIBILITY

Not all companies are eligible. They must have a profitable operating history for the last two or three years.

In addition, the company cannot have an existing relationship with one of the Lehigh Valley banks or must be unable to obtain lending services or products.

Kingsley said it is the network’s job to gather information on the financial assets and credit history of a business, determine loan specifics, see what grants and financing options are available and understand the preference of that business.

“We ask them, ‘What is your tolerance for state and federal government funding?’ Some of these programs take awhile to get through,” Kingsley said. “We will ask a business what types of banks they want to work with. Some only want to focus on community banks and others want to deal with big banks.”

BANKS PROPOSE OPTIONS

A lending inquiry is sent to the 17 banks in the network to request to borrow funds for projects such as a small-business expansion or a company’s relocation to the Lehigh Valley.

After the inquiry is sent, those banks selected will reply with what Kingsley calls creative financing options that may work for that business.

“The lending network is intended to be one-dimensional, bringing commercial lenders and borrowers together so that a business can receive the best possible financial incentives and economic development resources available,” Kingsley said, noting that there has not been a problem with getting banks to join the network.

“A company will come and say, ‘I need a building. How can I finance it?’ The banks want to be involved because they have an opportunity to compete for new business.”

NATIONAL AWARD

Presently, the network is able to offer financing through its economic development incentive programs at rates as low as 2 percent fixed for up to 15 years.

The lending network is housed in the LVEDC office in Bethlehem. It recently won the Excellence in Development Finance Program Award from the national Council of Development Finance Agencies.

“Most regions aren’t fortunate enough to have competing banks working in this unique way to support economic growth,” said Don Cunningham, president and CEO of LVEDC. “This is made possible because of the commitment of our banks and the strength of a regional economic development effort led by LVEDC.”

‘THEY DO NOT GIVE UP’

Robert Ammerman, president of Consolidated Storage Companies, said he recently used the lending network to obtain financing for his small business. He needed $4.5 million to buy his manufacturing building in Tatamy.

He credits the network for its tenacity and willingness to get his company financing when other lenders hesitated.

“Part of this was an application with the Small Business Administration, and on the other side we had to get a senior loan. Everything was going well, and then at the last minute (the financial institution) reneged on the agreement,” Ammerman said.

“… We hit that bump in the road, and they [lending network officials] kept going … and were able to help us find a new solution. They do not give up.”

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