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Middletown, NY - Congressman Maurice Hinchey (D-NY), along with representatives from Provident Bank, the Federal Home Loan Bank of New York (FHLB), the Small Business Administration (SBA) 504 Program, the Cities of Newburgh and Middletown, and the Progress Development Corporation (PDC) today announced a new $51 million initiative to boost family-owned and small businesses in Newburgh, Middletown, and Port Jervis. The Urban Development Advance initiative, entitled the Family Business Loan Program, will offer local small businesses below-market fixed rate commercial loans with reduced equity requirements and processing times. An estimated 600 jobs are expected to be created through this project.
"Family-owned and small businesses are the bedrock of our economy and we must do everything possible to grow and support them," said Hinchey. "This public-private partnership will provide a real shot in the arm to the ongoing economic revitalization efforts in Newburgh, Middletown, and Port Jervis. This is an important project that will create jobs by helping our local businesses expand and attracting new businesses to these communities."
Under the initiative, Provident Bank, an FHLB member bank, has agreed to sponsor this program and provide below-market rate commercial loans at fixed rates for terms up to 20 years. The PDC will package and process the loans, inject capital, assist in marketing and will closely coordinate its efforts with Provident Bank to ensure a smooth transactional process.
“Our bank has always placed a strong emphasis on supporting the communities we serve. We believe this program can help family-owned businesses thrive in Orange County,” said George Strayton, President and Chief Executive Officer of Provident Bank. “The program has the ability to create hundreds of jobs in Newburgh, Middletown and Port Jervis, providing a level of economic upturn that these cities have not experienced in years.”
Alfred DelliBovi, President of the Federal Home Loan Bank of New York said, "Today's $51 million business loan announcement is a result of the hard work and commitment of Provident Bank and the leadership of Congressman Hinchey, a Member of Congress who consistently supports this program and other similar programs. The Home Loan Bank is delighted to provide this Urban Development Advance to provide small family-owned businesses opportunities in Middletown, Newburgh, and Port Jervis."
The program provides long-term, fixed-rate financing to small businesses to acquire real estate, machinery or equipment for expansion or modernization. The initiative provides a number of distinct advantages to persons seeking small business commercial financing: loan rates will be provided below-market rates; the equity contribution from the borrower required for financing will be lowered to 10 percent of the project cost, which is significantly less than that required for most commercial loans; the loan approval process will be expedited for small business borrowers; and up to $25,000 per borrower will be made available in working capital financing.
The initiative is targeted at family-owned and small businesses, specifically in the Cities of Middletown, Newburgh and Port Jervis. In general, a small business is considered any business with revenue under $500,000 per year by the current SBA loans standards. However, many larger businesses may also qualify. It is estimated that this $51 million initiative will result in the creation of 600 hundred jobs, including 350 service-related jobs, 150 manufacturing jobs, and 100 managerial jobs.
Middletown Mayor Marlinda Duncanson noted, "We are very excited to work with the involved partners to provide this important boost to our local businesses. Along with our partner cities, Middletown is again making it clear that our community is open for business and committed to maximizing opportunities for small businesses interested in expanding or locating in the City."
City of Newburgh Mayor Nicholas Valentine said, "This economic development initiative fits in very well with our current and future revitalization programs. For small businesses, this is a vital tool for their growth and continued success."
Provident Bank has committed $25 million for this effort in addition to the $20 million commitment from the SBA 504 Program. The private equity component from participating businesses amounts to at least $5 million. Additionally, Provident Bank has provided $1 million for working capital financing, which allows persons carrying fixed asset financing to also be eligible for tandem working capital loans of up to $25,000 for a maximum term of seven years. The Cities of Newburgh and Middletown have both contributed $100,000, and the PDC contributed $50,000 to this effort. These funds will be used as a debt reserve for the working loan component of the program.
Small businesses interested in obtaining information regarding the program may contact: the City of Middletown's Economic Development Office at 845-346-4170, the City of Newburgh's Economic Development Office at 845-569-9400, or the Progress Development Corporation at 845-346-4148.
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