Media Center « Press Releases »

Press Release

FOR IMMEDIATE RELEASE

Abigail McDonough, Office of Congressman Kanjorski: 202-225-6511, Abigail.mcdonough@mail.house.gov

Neil Cotiaux, FHLBank Pittsburgh, 412-335-9488, Neil.cotiaux@fhlb-pgh.com

George Colburn, Main Technologies, 570-457-7081

Kanjorski Announces Creation and Retention of 2,585 Jobs at NEPA's Small Business on 10th Anniversary of "Banking On Business" Program
 
Small Business Lending Program Has Provided $100 Million
in Financing to 219 Local Companies
 
Old Forge, PA, August 20, 2010 – Today, Congressman Paul E. Kanjorski (PA-11) marked the 10th anniversary of a small business lending program by announcing that the Banking On Business (BOB) program has created and saved 2,585 jobs in Northeastern Pennsylvania over the last ten years using low-cost loans and traditional financing from local lenders. The program has so far successfully provided $100 million in combined financing to 219 local businesses. Congressman Kanjorski helped the Federal Home Loan Bank of Pittsburgh (FHLBank) establish its BOB program in 2000. He congratulated two dozen local lenders on their commitment to keep financing flowing to small and growing businesses, even in these tough economic times, through the BOB program.
 
“I am delighted to honor the community lenders who have helped many of Northeastern Pennsylvania’s small businesses to get off the ground, grow, and succeed,” said Congressman Kanjorski. “Since its inception, the Banking On Business initiative has, at no cost to taxpayers, created thousands of jobs in the region and assisted hundreds of small businesses to strengthen our local economy. I applaud the Federal Home Loan Bank of Pittsburgh and the many local lenders who have helped this program to succeed.  But, we have much more to do. Too many people are still struggling financially and we must do everything possible to create jobs and help small businesses in our communities grow. That is why I will soon be introducing legislation to require all Federal Home Loan Banks to do more to support small business growth and job creation.”
 
Created as a jobs-building tool, the BOB program offers financing to both start-up and growing businesses whose cash flow or outstanding equity otherwise would prevent them from qualifying for a more traditional bank loan. Working with the 23 community banks honored today, the FHLBank has committed $21.4 million in BOB financing to the 219 area businesses, coupled with a total of $78.3 million in loans from community banks. The combined $100 million in financing has created and preserved critical jobs across Northeastern Pennsylvania during the first decade of the BOB initiative, including those at Main Technologies, the site of today’s event.
 

How it works
 
The FHLBank is a government-sponsored enterprise created by Congress and regulated by the Federal Housing Finance Agency (FHFA). Its activities fall under the purview of the House Financial Services Committee and its Subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises, chaired by Congressman Kanjorski. The FHLBank uses private capital, not taxpayer dollars, to administer its programs.
 
“Local lenders remain the backbone of BOB,” said John Bendel, director of Community Investment at FHLBank. “Our Bank created the program with the strong backing of Congressman Kanjorski, but it is the local lenders committed to their communities who continue to do the heavy lifting. We offer all of them our sincere thanks for a job well done.”
 
Especially during these difficult economic times, banks are too often unable to lend money to small businesses which would provide these companies with needed financing. Without financing from banks, many of these small businesses will not survive. The BOB initiative offers recoverable assistance of up to $200,000 per small business, to be leveraged with financing from local lenders to help small businesses that need it most. Banks are much more willing to provide loans after the FHLBank provides some financing. 
 
BOB funds are competitive loans for individual businesses. Funds may be applied to a building purchase, land acquisition, construction, expansion, permanent working capital or other uses.  Repayment terms are flexible. There is no interest or principal repayment during the first year. Principal repayment at 3% begins in year two. Interest rises to 6% in year three and beyond.
 
Across FHLBank’s three-state district of Delaware, Pennsylvania and West Virginia, and working with a total of 89 members of the cooperative, BOB has overall provided combined financing of $195.1 million to assist 468 businesses over the past ten years, creating or retaining 5,308 jobs.
 
Next funding round opens shortly
 
For 2010, the FHLBank has set aside a total of $3.5 million in BOB funding on a first-come, first-served basis. This year’s second funding round, to disburse at least $1.5 million, opens on September 1.
 
“I strongly encourage interested and qualified small businesses to work with one of the 23 local lenders participating in BOB,” added Congressman Kanjorski. “This program has helped hundreds of local businesses secure needed financing to continue their operations, and expand and grow their businesses.”
 
Small businesses interested in BOB should contact the FHLBank’s Bill Joseph at 570-823-0644, or should contact one of the following lenders: American Bank, Community Bank & Trust, ESSA Bank & Trust, Fidelity Deposit and Discount Bank, First Citizens National Bank, First Columbia Bank & Trust, First Keystone National Bank, First National Bank of Palmerton, First National Community Bank, Franklin Security Bank, Honesdale National Bank, Jersey Shore State Bank, Jim Thorpe National Bank, KNBT (a division of National Penn Bank), Landmark Community Bank, Luzerne Bank, New Tripoli Bank, Northumberland National Bank, Penn Security Bank, Peoples National Bank, Peoples State Bank, The Dime Bank, or Wayne Bank.

Main Technologies: a BOB success story
 
Main Technologies, the host for today’s BOB celebration, is the new name for Main Tool and Machine Company. The company began with eight employees at its founding. As a result of applying for and receiving BOB funding, Main Technologies now has 25 employees, including two who were hired in the past several months.
 
A precision machining facility, Main Technologies specializes in stainless steel machining and fabrication along with all other types of materials. The company’s experience includes providing prototype and production machining, specialized machining, sheet metal and fabrication services and complete automation systems.
 
George Colburn, Chief Operating Officer of Main Technologies, founded Main Tool and Machine Company and spoke at today’s event.