Clearly Ahead Offering New Revolving Loan Fund

CLEARFIELD – Clearly Ahead Development was awarded $1,122,500 in September from Pennsylvania’s Department of Community & Economic Development.

The funding was made available through the State Small Business Credit Initiative funded by the American Rescue Plan Act to establish a new Revolving Loan Fund.

Loans from this fund are designed to provide low-cost, flexible financing that will be used to fund startups and small businesses in Clearfield County, said Rob Swales, Clearly Ahead CEO, at Tuesday’s Clearfield County Commissioners’ meeting.  

There will be an emphasis on disadvantaged, minority-owned, socially- and economically-disadvantaged individuals owned, COVID-impacted and economically-depressed areas.

Projects will be prioritized based upon which promote business revitalization and growth, diversify the local economy, strengthen supply chains and create/sustain jobs, Swales said.

Eligible applicants include:

• new or existing for-profit businesses;
• businesses and projects located in Clearfield County;
• a substantial U.S. citizen or those with legal-resident ownership; and
• those with no delinquent debt or previous loss to the federal government, bankruptcy in last 10 years, unsatisfied judgments, tax liens or active collections.

Eligible uses include:

• purchase, construction, renovation or tenant improvements of an eligible place of business that is not for passive real estate investment purposes;
• machinery and equipment;
• working capital;
• automation projects;
• start-up costs;
• franchise fees;
• inventory; and
• services used in the production, manufacturing or delivery of a business’ goods or services.

Ineligible uses include:

• refinancing of existing debt;
• real-estate investment properties;
• projects that are speculative in nature;
• purchase of goodwill during a business acquisition;
• repayment of delinquent withholding taxes or other funds that should be held in trust or escrow;
• gambling activities; and
• illegal activities.

Repayment terms are as follows:

• Land and Buildings, up to a 10-year term;
• Machinery and Equipment, up to a seven-year term; and
• Working Capital, up to a three-year term.

Loan Amounts

Loan requests may not exceed 50 percent of the total project costs or $100,000, whichever is less, Swales said.

Loan requests under $50,000 will be considered “microloans” and subject to terms, conditions and rates set by the Loan Review Committee on a case-by-case basis.

CAD funds cannot be the sole source of financing for a project, according to Swales.

Funds from the CAD program must be leveraged at least 1:1 with other non-state/non-federal loan funds or private loan funds, he said.

Cash/equity contributions from the borrower does not qualify as suitable leverage.

Interest Rates

The interest rate will be determined based upon the loan purpose, term, collateral and associated credit risk, Swales said.

Fees

• There is an origination fee of 1 percent of the loan amount, which will be charged to the borrower at closing.
• The borrower is responsible for the cost of document preparation as charged by Clearly Ahead’s solicitor, UCC filing fees, recording of mortgages and other charges incurred throughout the life of the loan, including CC continuations/terminations and mortgage satisfactions.
• A non-refundable application fee equal to one half of 1 percent (.5 percent) of the requested loan amount or $250 – whichever is higher – will be collected from the borrower at the time of initial application. The application fee will be applied as a credit towards closing costs at time of loan closing.
• There is no penalty fee for early repayment.

Documentation Requirements

• Cash Flow: Historical cash flow or projected cash flow must be adequate to service new and existing debt.
• Credit History: Business must have satisfactory history of meeting debt obligations in a timely manner. Business owners must have reasonable and responsible personal credit history.
• Management: Company must have experienced management to successfully operate the business.
• Collateral: Loan amounts greater than $10,000 require collateral at the highest lien position available on the assets to be financed and/or existing assets. Additional collateral may be required.
• Guarantees: All loans require personal/corporate guarantees of owners/shareholders with 20 percent or greater ownership in the business.
• Insurance: Hazard insurance is required on secured assets.

How to Apply

Interested applicants should contact Clearly Ahead staff to discuss their project and determine eligibility, Swales said.

For more information or to discuss your project, please contact: Swales at 814-768-7838, ext. 202, rswales@ClearlyAhead.com, or Paul McCloskey, vice president of energy & business development, at 814-768-7868, ext. 205, pmccloskey@ClearlyAhead.com.