The Erie County Industrial Development Agency is launching a new $4 million loan fund aimed at small businesses, mainly in a half-dozen of the Buffalo Niagara region’s targeted industries, from advanced manufacturing and life sciences to back offices and logistics.
The fund, which will include loan guarantees through the U.S. Small Business Administration, will combine nearly $1 million in funding from the IDA with another $3 million in funds through the Grow America Fund.
The Grow Erie Fund will give the agency more flexibility in offering loans to growing local businesses than its current offerings, said John Cappellino, the IDA’s executive vice president.
The Grow Erie Fund’s loans can be for a much longer term – up to 25 years – that can help borrowers keep their monthly payments low, he said. The loans also offer lower down payments and lower interest costs than other financing alternatives.
The loans can range between $100,000 to $2 million, which is much larger than the loans available through the Buffalo and Erie County Regional Development Corp., where a $1 million loan is considered to be large. Most loans are expected to be in the $500,000 range, Cappellino said.
The Grow Erie Fund’s loans also can be used to finance construction projects.
Buffalo Mayor Byron W. Brown said the city has been working with the nonprofit National Development Council for years and praised the group’s involvement in the new initiative.