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Washington, D.C. - Less than three months after announcing a new partnership between the Small Business Administration (SBA), the Federal Home Loan Bank (FHLB), and a local bank designed to boost family-owned and small businesses in the cities of Orange County, Congressman Maurice Hinchey (D-NY) today announced that the first loan awards from the new initiative have been made to Prestige Graphics located in Middletown.
"We are already seeing the results of this new, low-interest loan program for family-owned and small businesses," Hinchey said. "The City of Middletown and Mayor Marlinda Duncanson deserve a lot of credit for their vision and effort to get this program off the ground. Now, through this initiative, a growing local company, Prestige Graphics, will remain and expand its business in Middletown, adding new jobs in the city and helping to grow the local economy. Family-owned and small businesses are the foundation of our economy, which is why programs like these are so critical to the economic well-being of the Hudson Valley."
The $51 million partnership announced in late July is between Provident Bank, the FHLB, the SBA's 504 Program, the Progress Development Corporation (PDC), and the Cities of Newburgh, Middletown, and Port Jervis. The initiative, entitled the Family Business Loan Program, offers local small businesses below-market fixed rate commercial loans with reduced equity requirements and processing times. An estimated 600 jobs will be created through this project. Under the initiative, Provident Bank, an FHLB member bank, sponsors this program and provides below-market rate commercial loans at fixed rates for terms up to 20 years. The PDC serves to 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.
Prestige Graphics had been looking for a new building to expand its production capabilities. The company was looking at properties outside of Middletown, but the new loan program provided financing incentives for Prestige to purchase a building in Middletown. In addition to remaining in Middletown, Prestige Graphics will create 10 new full-time jobs over the next two years, which will help contribute to the economic revitalization of the city. Prestige Graphics will receive a $227,200 low-interest, below market loan from the SBA 504 program and a $284,000 loan from Provident Bank/FHLB. Under the terms of the agreement, Prestige Graphics will invest 10 percent ($56,800) of the total new investment cost of the property, valued at $568,000.
The loan 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 are provided below-market rates; the equity contribution from the borrower required for financing are lowered to 10 percent of the project cost, which is significantly less than that required for most commercial loans; the loan approval process is expedited for small business borrowers; and up to $25,000 per borrower can be made available in working capital financing.
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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