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?
You’re 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 money from the city and other public and private sources.
“The mayor and his top cabinet members, as well as members of City Council, are on our board and the Chamber of Commerce also appoints some of our board members,” said Anne Bovaird Nevins, PIDC’s president.
The goal of the organization — which has about 55 people in two city locations — is to help businesses in the city grow and create jobs. So any financing project that aims to meet these objectives is something the organization, which began in 1958, will consider.
The PIDC has provided capital and resources that have helped revitalize neighborhoods, launch the Philadelphia Navy Yard, and assist even the smallest of companies when they couldn’t get assistance from other sources.
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David Simms is a great example of a small-business owner who recently took advantage of PIDC financing. His nine-person catering business located in Cedarbrook — Eatible Delights Catering — needed capital to move locations, and he was having a hard time 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 were very good about guiding me and holding my hand because I knew nothing about getting a commercial mortgage,” Simms said.
There’s a misconception that the PIDC finances only real estate transactions. That’s 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-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 transactions, 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-advantaged 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 more than $115 million in additional investments since the beginning of 2020.
After being turned down from his existing bank, Stephan Reeves — who runs a diversity, equity and inclusion firm called Montage Diversity — sought out PIDC’s services for a $50,000 loan to help 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 receive the funds directly from the PIDC easily.
“Other than some banks, the PIDC is willing to have conversations with entrepreneurs because that’s what they’re here for,” he said. Reeves plans on reaching 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,” Bovaird Nevins said. “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.”
Gene Marks is a certified public accountant and the owner of the Marks Group, a technology and financial management consulting firm in Bala Cynwyd.
The Philadelphia Inquirer is one of more than 20 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push toward economic justice. See all of our reporting at brokeinphilly.org.