24/09/2022

UDS-Biz

Growing Your Income

This little known Philadelphia nonprofit loans small businesses money even after banks reject them

Is your small business looking for financing to grow but banks aren’t interested because you’re too small, or you don’t have a long financial history or maybe you’ve suffered financial problems in the past? Don’t worry. You’re not out of options. You should talk to the Philadelphia Industrial Development Corporation, now known simply as PIDC.

Don’t be put off by the word “industrial” either. The PIDC is an independent, nonprofit organization co-founded by The City of Philadelphia and the Greater Philadelphia Chamber of Commerce that provides financing to Philadelphia businesses using money from the city and other public and private sources.

“The Mayor and his top cabinet members, as well as member of City Council are on our board and the Chamber of Commerce also appoints some of our board members,” says Anne Bovaird Nevins, PIDC’s President. “It truly is a place where the public and private sector come together to drive growth in Philadelphia.”

The goal of the organization – which has about 55 people in two city locations – is to help businesses in the city grow and – most importantly – create jobs. So any financing project that aims to meet these objectives is something the organization, which started in 1958, will consider.  The PIDC has provided capital and resources that has helped revitalize neighborhoods, launch the Philadelphia Navy Yard and assist even the smallest of companies when they couldn’t get help from other sources.

» READ MORE: Philly and PIDC to provide a $9 million relief fund for small businesses. Tax deadlines pushed back.

David Sims is a great example of a small business owner who recently took advantage of PIDC financing. His nine-person catering business located in Cedarbrook – Eatable Delights Catering – needed capital to move locations, and he was having a hard time getting help from local banks because of a poor credit history.

“I went to the PIDC because I was in a bad rental situation and I wanted to purchase my own property,” he said. The organization helped Simms clean up his past liens and put him through one of their popular “boot camp” which teaches the basics of business management to participants.

“They really worked with me so that I could become a better product for their product,” Sims said. “They were very good about guiding me and holding my hand because I knew nothing about getting a commercial mortgage.”

There’s a misconception among some of my clients that the PIDC only finances real estate transactions.  But that’s not the case. Most of PIDC’s customers are smaller businesses seeking financing that they were unable to secure with a traditional bank and it’s not necessarily related to real estate.

Since its inception more than 60 years ago, the organization has provided $31 billion to Philadelphia-based businesses – manufacturers, commercial and retail as well as minority-owned and nonprofits – in about 10,000 transactions primarily through loans, tax-exempt financing and technical assistance. Financing is also provided for working capital and to purchase equipment and other assets.

PIDC funds its operations through transaction, financing and consulting fees. The organization also conducts Business Builder Workshops in partnership with Comcast RISE and partners with dozens of organizations both nationally and in the area that provide support and services for small businesses.

The PIDC also finances developers looking to start or finish neighborhood projects and helps its customers leverage certain tax-advantage programs for projects in blighted and low income areas. It also offers tax-exempt bond programs that benefit both manufacturers and nonprofits. Among its recent activities the organization invested $27 million in projects led by developers of color that supported over $115 million of additional investments since the beginning of 2020.

After being turned down from his existing bank, Stephen Reeves – who runs a diversity, equity and inclusion nonprofit called Montage Diversity – sought out PIDC’s services for a $50,000 loan to help hire a new employee in 2020. Similar to a bank loan Reeves says he had to provide the “typical documentation” for a loan, including tax returns and financial documentation and was able to receive the funds directly from the PIDC easily.

“Other than some banks, the PIDC are willing to have conversations with entrepreneurs because that’s what, that’s what they’re here for,” he said. Reeves told me he plans on reaching back out to the organization for more financing in the not-too-distant future.

Even though many small businesses seek out the PIDC for loans in lieu of a traditional bank loan, the organization also partners with banks to help provide additional financing that complements what a bank is already offering.

“Maybe a business needs a term loan and the term loan exceeds what the bank is willing to do for that particular customer,” said Bovaird Nevins. “That could be a great opportunity for us to get involved. We have a lot more flexibility and can even – in some cases – get loans approved that are under collateralized.”