By Irene Miller
What do you do when you have a great idea and a business plan, but you can’t get the support you need to be successful? Where can you go for financing needs when your business may be seen as a higher risk by traditional lenders like banks? There are places to go in Centre County where newly formed and existing businesses can receive advice, support, and potentially a loan from an industrial development authority (IDA).
Recently, three board members from College Township’s IDA spoke to attendees of the ABC Essentials program. ABC Essentials demystifies the world of authorities, boards, and commissions for attendees. The program is hosted monthly at the CBICC office and is conducted in collaboration with local municipalities. The March session was led by College Township’s IDA.
“We want to take a business that is not conventionally bankable and make them conventionally bankable,” explained Alison Kurtz, President of Ameron Construction Company and Chair of the College Township IDA. “We’re serving that middle ground between venture capital and conventionally bankable.”
Put another way, Kurtz described a loan continuum. On one end is the nascent idea for a business, where the entrepreneur may be housed in a space like New Leaf Initiative, Happy Valley Launchbox, Bellefonte Springboard, or the Philipsburg Business Incubator. At the other end is a fully matured business that has the ability to secure a conventional loan from a bank.
In the middle of the loan continuum is where things get interesting. While angel investors or venture capital may help, it’s not always available. Another option is a loan from an IDA.
“People often describe [the IDA] as ‘the best kept secret in Centre County,’” noted Kurtz.
Kurtz said that people can find more information online, at a public meeting on the third Wednesday of each month at 9:30 a.m., or on C-NET. Board members are frequently networking in the community to get the word out to people and new businesses. There are a couple of other ways that word spreads in the community too.
Commercial lenders at banks may approach an IDA to partner on a loan. Kurtz described a hypothetical situation in which a bank might be asked for a $100,000 loan, but only feel comfortable approving $50,000. The bank representative may then approach an IDA to loan the remainder needed by the new business.
Another way new businesses are connected to potential loans from IDAs is through the CBICC and its partners.
“We rely on the Chamber and their staff and their expertise,” said Kurtz, who is also a member of the CBICC’s Loan Committee. “A lot of our prospects come from the Chamber.”
With Happy Valley’s close-knit community, partnership is prevalent – especially when it comes to assisting new and existing businesses. Local municipalities routinely partner with the CBICC, working together to provide businesses with the resources and assistance necessary to retain and grow jobs in the community.
“Our main mission is creating jobs,” explained Kurtz. “Are we retaining jobs? Is a business planning to staff up?”
“When someone comes in front of us, we expect to see a business plan,” stated Bill Sharp, a board member on College Township’s IDA and a former College Township Supervisor.
“Our board has a very diverse group of members, which really helps us work with clients,” explained Ray Forziat, another board member of the College Township IDA. “We have the ability to see their business from different perspectives.”
If a business is not quite ready for a loan or doesn’t have a business plan, there are resources to help them prepare for a future loan request. SCORE, Penn State’s Small Business Development Center, and other local groups offer a plethora of tools, including mentorship, business plans, seminars, and legal advice.
If a business is ready for a loan, it can be very rewarding for all parties involved.
“It’s so much fun to help these young companies,” said Kurtz. For example “Xact Metal is really poised to take off like a rocket.”
Xact Metal’s team was lauded for balancing engineering ingenuity with experienced business strategy. Another stand-out was Dominight.
“[Rick Hall of Dominight] is over in Julian making solar light panels that you might see up at [Beaver] Stadium,” continued Kurtz. “Instead of using diesel engines, he’s using solar and reducing the carbon footprint.”
These anecdotes and a corresponding list of loans to local companies across Centre County prompted a question.
“What is your reach?” asked Joleen Hindman of FirstEnergy.
“We’ve expanded beyond College Township,” acknowledged Forziat. “We’re hoping to attract more businesses to the immediate area, but we’ll work within Centre County or even beyond.”
Vision was emphasized and is a priority for the College Township IDA board members. They can see the interconnectivity of Centre County as a whole and the need for visionary investment partners. They are also thinking long-term and from a recruitment perspective.
“We are looking at how to develop this community in such a way that it’s a great place to live,” added Sharp. “That means economic development and maintaining the environment.”
Sharp volunteers on the College Township IDA, as well as the College Township Planning Commission and the Spring Creek Watershed Commission.
“I have one foot in the business community and one foot in the sustainability community,” described Sharp.
Forziat added that he challenges himself by asking, “in 30 years, what will the [College Township IDA] board members be facing?”
“We’ve found our sweet spot,” Kurtz explained. “It’s in the $75,000 - $200,000 range, no longer than five years. We want to get that money back and redeploy it to another business.”
And after the loan is complete? Dr. U.B. Bakker asked about the loan recipient alumni. He suggested an alumni event to learn from one another and pass the good will forward to the next generation of business entrepreneurs.
Another idea was voiced by Tom Songer of the Torron Group. Citing the cost of annual audits, staff hours, and volunteer hours, Songer suggested “we pare down the number of IDAs that we have in the community.”
“There’s a lot of redundancy, I agree,” acknowledged Kurtz.
Sharp spoke from his experience with the Spring Creek Watershed Commission and the amount of decision makers at one table.
“I believe we found 31 land and water decision making bodies that touched the Spring Creek Watershed,” said Sharp.
Kurtz summed up the session with customary vision.
“We need a holistic approach to planning,” Kurtz concluded.
Sharp added that College Township IDA is looking for volunteers to help them shape the future of the community.
If you’re ready to volunteer on an ABC, please contact your municipality to inquire about their application process. Or, attend a public meeting to get an idea of current topics.
Currently, College Township’s Industrial Development Authority board members include:
Alison Kurtz, Chair
Bill Sharp, Vice Chair
Sara Parks, Secretary
Ray Forziat, Assistant Secretary
Anne Stuart, Treasurer
David Wasson, Assistant Treasurer
Benson Lichtig, Director
Greg Koehle, Alternative Director
Jeffery Stover, Solicitor
If you are interested in joining the community conversation, please join us each month as we explore the world of ABCs – authorities, boards, and commissions. Each session is free and includes complimentary refreshments as well as networking opportunities. Learn more and sign-up at cbicc.org.
Special thanks to Maher Duessel for sponsoring the ABC Essentials program.
To read more about the ABC Essentials program, please click here.