Oct. 30, 2003: Oswego
County Among Top SBA Loan Producers for Region
According to the U.S. Small
Business Administration (SBA), Operation Oswego County (OOC) is
currently ranked seventh in the region and among the top 50 percent
in the nation for SBA 504 loan approvals. Oswego County is located
in SBA Region 2 which includes New York State, New Jersey, Puerto
Rico and the U.S. Virgin Islands. Districts in New York State include
Syracuse, Buffalo and New York City. OOC ranked 12th in the 15-county
Central New York area for the total number of loans approved in
2002.
For the period January through
September 2003, OOC facilitated the approval of 10 loans for a total
of $1.6 million-- up 150 percent from 2002. According to the SBA,
on a national level, loan approvals have increased 23 percent and
the dollar amount of the loans has increased by 25 percent in 2003.
OOC, an SBA Certified Development
Company (CDC), is authorized to finance projects using the SBA 504
loan program. The SBA 504 program is designed to promote economic
development growth and job creation in small businesses and make
the overall financing structure for a new business or project more
attractive and affordable.
“Small business development
plays a significant role in job creation and retention in Oswego
County,” said L. Michael Treadwell, CEcD, executive director
of OOC. “The success of the SBA 504 program in Oswego County
is especially encouraging as we face this period of economic recuperation
following the closings of major manufacturers such as Nestle and
International Paper.”
The 504 loan program offers
accessible, fixed rate, long term financing for land, buildings
and equipment. Businesses eligible for SBA 504 loans are independently-owned,
for-profit businesses that are ready to expand and create jobs.
They must have a net worth less than $6 million and annual after-tax
profit of less than $2 million.
"By utilizing SBA's 504
program, Operation Oswego County is able to provide the financing
that is so critical to small business expansion and job growth in
Oswego County. It's an effective tool that should be in every economic
developer's toolbox,” said SBA Syracuse District Director
Bernard J. Paprocki.
A CDC such as OOC finances 40
percent of the project with an SBA 504 loan, and the small business
provides ten percent equity. The SBA 504 loan is guaranteed 100
percent by the U.S. Small Business Administration.
Key points about the SBA 504
loan program include:
- for every $35,000 of the SBA 504 loan,
the project must create at least one new job;
- machinery and equipment financed must
have a useful life of at least 10 years;
- for construction of a new building, the
small business borrower must plan to occupy at least two-thirds
of the space;
- for purchase or remodeling of an existing
facility, the small business borrower must plan to occupy at least
50 percent of the space;
- the borrower must qualify as a small business.
According to the SBA, about 98 percent of all U.S. companies meet
the agency's definition of a small business; and
- the minimum size of a SBA 504 loan is
$50,000, while the maximum is typically $1 million. The interest
rate is fixed for the entire 10 or 20 year term of the loan.
For more information on the
SBA 504 loan program or other economic development services in Oswego
County, call Operation Oswego County, a private, non-profit organization
working to enhance and protect the economic climate of Oswego County,
at 343-1545 or visit www.oswegocounty.org.
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