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PHILADELPHIA, PA (March 27, 2014) — The Local Initiatives Support Corporation (LISC) is filling a gaping hole in the financial market. With a new line of small business loans, LISC will provide much-needed support to entrepreneurs who set up shop in low-income communities, including in Philadelphia.
Working with the Small Business Administration (SBA) and its Community Advantage program here in Philadelphia, LISC will provide loans under $250,000 to small businesses that put down roots in troubled neighborhoods, as well as those looking to expand. LISC, which has worked to revitalize low-income communities for more than three decades, is only the third organization in the country to gain federal approval to make such loans on a national scale.
“If we are to make low-income neighborhoods safer, more prosperous places to live, we need to support businesses that are the backbone of local economies,” said Andrew Frishkoff, executive director of Philadelphia LISC. “There is really no private market solution for this kind of financing. Loans of this size are hard to come by for any business owner. For those operating in low-income areas, they are almost nonexistent.”
Initially, Philadelphia LISC will partner with local community development corporations to deliver Community Advantage loans into targeted commercial corridors where the other community development investments of LISC and others can be leveraged. Loans can be used to finance working capital, inventory, equipment, business acquisitions, real estate development and tenant improvements that help small businesses thrive.
Small businesses in Philadelphia are looking forward to this new financing opportunity . “It is so hard for small businesses to get loans, and urban businesses that drive job creation have a really difficult time attracting equity,” said Gabriel Mandujano of Wash Cycle Laundry. “[The LISC] program looks like it can help solve this conundrum.” Wash Cycle is a member of Sustainable Business Network (SBN) in Philadelphia, a community of local businesses committed to building a just, green, and thriving economy in the region.
“These loans also address key gaps in our lending market,” said Jamie Gauthier, Executive Director of SBN. “Our recent study, Taking Care of Business, showed that small businesses in the Philadelphia region have an extremely hard time accessing needed capital—currently, it is hardest for businesses to secure financing in the $50,000-$250,000 range for flexible uses like working capital. LISC is taking an important step towards economic development in our city and in the neighborhoods that need it most.”
Because LISC’s new loan products are just what many of SBN’s member businesses have been looking for, LISC is working to connect SBN member businesses to financing. “We're grateful that LISC has provided an additional avenue for small businesses such as ours to have access to capital to grow and create local jobs," said Akil Marsh of Solar States, another SBN member company.
The loans complement LISC’s existing work to provide grants and advice to support commercial corridor revitalization efforts and link economic development strategies to broader neighborhood plans. In addition to Community Advantage, LISC’s affiliate New Markets Support Company also provides SBA 504 loans and leverages New Markets Tax Credits to support these efforts.
>> Visit www.sbnphiladelphia.org, for more information about SBN and its member businesses.
About Philadelphia LISC:
Philadelphia LISC is a local program of the Local Initiatives Support Corporation, (LISC), a national non-profit development organization dedicated to transforming neighborhoods into healthy, sustainable communities of choice and opportunity. Philadelphia LISC works with Community Development Organizations (CDCs), to provide the tools and programs needed to initiate positive change and transform neighborhoods into healthy, vibrant communities. For more information visit www.lisc.org/philly.
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