County Executive News

Albany County Business Development Corporation Lowers Interest Rate on Business Loans

Reduction will save borrowers thousands
      

The Albany County Business Development Corporation (ACBDC) has received approval from the U.S. Department of Commerce's Economic Development Administration to lower the interest rate for loans funded through the Al Tech Trust Fund to prime minus 4 percent, with a floor of 4 percent. The previous interest rate was prime minus 3 percent, with a floor of 5 percent.

The Albany-Colonie Regional Chamber of Commerce is the agent for the ACBDC, which administers the Al Tech Trust Fund.

"We're constantly looking for ways to improve the Al Tech Trust Fund, and this reduction in the interest rate is a positive development that will benefit borrowers and spur economic growth in Albany County," said Kevin Catalano, the Chamber's loan officer. "As an example, a 1 percent decrease in the interest rate on an average $300,000 Al Tech Loan to purchase real estate could translate into a $27,000 savings for the borrower over the life of the loan."

The Al Tech Trust Fund's mission is to promote economic growth in Albany County by offering financing to small- and medium-sized businesses that demonstrate strong possibilities for growth, real property improvement, increased employment and retention of employees in the community. The reduced interest rate became effective August 1 and applies to all new loan applicants and any loans that are currently being processed.

"The Al Tech Trust Fund has been responsible for thousands of jobs and millions of dollars of investment in our community. The new reduced interest will increase business opportunities in Albany County and help companies grow and thrive," said Albany County Executive Michael Breslin.

One such company is Sandell Manufacturing, a local manufacturer specializing in products used in commercial masonry, specifically moisture protection products, and expanding into a masonry reinforcement line.

"This new venture will not only expand our product offering to the marketplace as it begins to recover, but will expand our capacity and employment opportunities, as well," said Sal Minucci, CEO of Sandell Manufacturing. "The cost to do this is, of course, substantial. Any relief we may receive from Al Tech with this lower interest rate will be advantageous and will directly correlate to the overall success of the product line."

Specifications and requirements of the $17 million Al Tech Loan Trust Fund include the following:

• The current amount available for request is $50,000-$500,000.
• There is a $350 non-refundable application fee due upon submission of the loan application.
• Commercial mortgages funded by the Al Tech Loan Fund are mortgage tax exempt.
• Term requirements are 5-15 years, depending on the use of the proceeds.
• The borrower must be located in Albany County for the term of the loan.
• Proceeds from the loan can be used for working capital, purchase of fixed assets and equipment, or acquisition and renovation of owner-occupied commercial real estate.
• Proceeds from the loan cannot be used for refinancing existing debt or payment of delinquent taxes.

The Al Tech Trust Fund originated in 1976, when the U.S. Department of Commerce provided funding to Al Tech Specialty Steel in Pennsylvania. The funding was provided to enable Al Tech to purchase the assets of Allegheny Ludlum Industries, Inc.

Pursuant to the agreement of this financial relationship, the money provided was then repaid into a trust fund, and the Al Tech Trust Fund was created. One of the conditions established by the federal government was that the funds generated from the repayment must be used to create and retain jobs in Albany County.

The resulting impact to the local business community since the inception of the fund has been outstanding. Since 1994 alone, the fund has helped create more than 1,235 jobs and retained more than 1,927 jobs. In that same time period, the Al Tech Trust Fund has funded 130 loans for more than $25 million and has been a part of more than $85 million in economic growth projects in Albany County.

In addition, the Chamber administers the Technology Assistance Fund (TAF) as part of the Al Tech Trust Fund under the auspices of the ACBDC. The ACBDC created the TAF in June 2008 to assist growing technology companies in Albany County. The TAF is capitalized at $1.5 million and designated for the purpose of affording Albany County the opportunity to foster emerging technology ventures that have a high probability of creating new employment opportunities and increasing the standard of living in the region. TAF loans are typically in the $200,000 range.

Businesses that want to learn more about Al Tech Trust Fund loan opportunities should contact Kevin Catalano, the Chamber's loan officer, at 518-431-1423 or kevinc@acchamber.org.

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