This Little-Known Philadelphia Nonprofit Loans Money to Small Businesses Even After Banks Turned Them Away
Your small business is looking for financing to develop but the banks are not interested because you are too small? Or you don’t have a long financial history or maybe you have suffered from financial problems in the past? You are not out of options. You should talk to the Philadelphia Industrial Development Corporation, now known 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 city money and other public and private sources.
“The mayor and his key cabinet members, as well as members of the city council sit on our council and the Chamber of Commerce also appoints some of our council members,” said Anne Bovaird Nevins, president of the IPDC.
The aim of the organization – which has around 55 people in two towns – is to help businesses in the town grow and create jobs. So any fundraising project that seeks to achieve these goals is something the organization, which began in 1958, will consider. The IPDC provided capital and resources that helped revitalize neighborhoods, launch the Philadelphia Shipyard, and help even the smallest businesses when they couldn’t get help from other sources.
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David Sims is an excellent example of a small business owner who recently benefited from IPDC funding. His nine-person Cedarbrook-based catering business – Eatable Delights Catering – needed capital to relocate, and he was struggling due to a poor credit history.
“I went to PIDC because I was in a bad rental situation and wanted to buy my own property,” he said. The organization helped Sims clean up his past privileges and put him through one of their popular “boot camps” which teaches participants the basics of business management.
“They were really good at guiding me and holding my hand because I didn’t know anything about getting a commercial mortgage,” Sims said.
There is a misconception that the IPDC only funds real estate transactions. This is not the case.
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 and nonprofits – in approximately 10,000 transactions, mainly through loans, tax-exempt financing and technical assistance. . Funding is also provided for working capital and for the purchase of equipment and other assets.
PIDC funds its operations through transactions, financing and advisory fees. The organization also hosts business creation workshops in partnership with Comcast RISE and partners with dozens of organizations both nationally and in the region that provide small business support and services.
The IPDC also finances developers looking to start or complete neighborhood projects and helps its clients take advantage of certain tax advantage programs for projects in disadvantaged and low-income areas. It also offers tax-exempt bond programs that benefit both manufacturers and nonprofits. Among its recent activities, the organization has invested $27 million in color developer-led projects that have supported more than $115 million in additional investments since the start of 2020.
After being turned down by his existing bank, Stephen Reeves – who runs a diversity, equity and inclusion nonprofit called Montage Diversity – sought the services of PIDC for a $50,000 loan to help to hire a new employee in 2020. Reeves said he had to provide the “typical documentation” for a loan, including tax returns and financial documentation and was able to easily receive the funds directly from IPDC.
“Apart from some banks, the IPDC is open to having conversations with entrepreneurs because that’s what they’re there for,” he said. Reeves plans to approach the organization for more funding in the not too distant future.
Although many small businesses seek loans from the IPDC instead of a traditional bank loan, the organization also partners with banks to help provide additional financing that complements what a bank already offers.
“Perhaps a business needs a term loan and the term loan is beyond what the bank is willing to do for that particular customer,” Bovaird Nevins said. “This could be a great opportunity for us to get involved. We have much more flexibility and can even – in some cases – get loans approved that are under-secured.