Programs Facilitate Manufacturing Development and Growth – Oswego County Business Magazine
By L Michael Treadwell
Operation Oswego County and the County of Oswego Industrial Development Agency administer a variety of programs and initiatives aimed at small and large manufacturing companies seeking financial and property development assistance for a project.
Operation Oswego County (OOC) is a Small Business Administration (SBA) certified development company and eligible to fund projects through the SBA 504 loan program, which is designed to support growth in economic development and small business job creation support financially.
The program can make the overall financing structure more attractive and affordable for a new or expanding manufacturer. The SBA 504 program provides accessible, fixed-rate, long-term financing for land, buildings and equipment. This program is available to companies with fewer than 500 employees and can fund up to 40% of fixed assets up to $5.5 million, with some minimum requirements for job creation and retention. This program is attractive due to the low equity requirement of 10%, which enables financing of up to 90% between the SBA and a participating bank.
The MEP loan is available for very small manufacturing companies whose owners have completed the Micro Enterprise Training Program (MEP). This financing program is ideal for very small businesses with five or fewer employees. This program can fund up to $25,000 in business expenses and can be used for a variety of purposes including real estate, machinery, equipment and working capital. When an eligible manufacturing project requires a larger pool of financing, the MEP loan can be used in conjunction with other financing options. This program is administered by the County of Oswego IDA (COIDA).
COIDA also manages several Economic Development Fund (EDF) programs aimed at creating and maintaining jobs through the expansion of existing businesses or the creation of new ones, increasing the county’s tax base, diversifying the county’s economic base, and improving quality to improve life in Oswego County. COIDA EDF funding can be used to purchase machinery and equipment, inventory or to provide working capital. When purchasing machines and systems, the funds are typically in the form of leasing. Funding from EDF programs ranges from $50,000 to $250,000, but can be less depending on need.
Examples of manufacturing companies that have benefited from COIDA EDF funding include: K&N’s Foods USA in Fulton; HealthWay Home products in Richland; United Wire Technologies in Constantia; Universal Metal Works in Fulton; Marmon Company in Williamstown; Design Concepts & Businesses in Hastings; and R&D Design and Associates in Schroeppel.
Another lending program used by COIDA is the USDA Intermediary Relending Program (IRP). The IRP program offers short-term, fixed-rate loans. This is a unique program funded by the agency by borrowing funds from the US Department of Agriculture and passing those funds on to eligible companies. Similar to the SBA 504 program, the IRP requires a minimum of 10% cash capital for the project, and the IRP funds cannot fund more than 50% of the project cost. IRP loan proceeds can be used to purchase machinery and equipment, inventory, or to cover soft costs, start-up costs and working capital. Loans can be made with IRP funds from as little as $20,000 up to $250,000. The IRP funding program targets the more rural areas of Oswego County outside of the cities of Oswego and Fulton.
Local manufacturers who have taken advantage of the IRP program include Designer Hardwood Flooring in Williamstown; Fulton tool in Fulton; Universal Metal Works in Fulton; and D&D Logging & Lumber in Palermo.
COIDA may also provide financial assistance to qualified manufacturing business applicants in the form of the issuance of tax-exempt or taxable income bonds or by participating in direct leasehold transactions for the purpose of transferring property taxes, sales and use taxes, and/or mortgage registration taxes, except for exceptions. These tax incentives are called tax deductions, or PILOT for short. The duration of the value of property tax reduction benefits for manufacturing projects under COIDA’s unified tax exemption policy is 20 years.
Manufacturers who have taken advantage of the agency’s direct lease transaction incentives to grow and expand their business or establish a business in Oswego County include the following: Novelis Corporation of Scriba; Huhtamaki in Fulton; EJ USA in Schroeppel; Felix Schoeller in Richland; Le Roi in Oswego; Pathfinder Industries in Fulton); and SAM North America in Schröppel.
OOC offers technical assistance to manufacturing companies wishing to submit a NYS Consolidated Funding Application (CFA) through the CNY Regional Economic Development Council. This single application gives applicants access to multiple government funding sources, including Empire State Development Grants and the Excelsior Tax Credit program. Currently, round 12 of the CFA is open for applications until July 29, 4 p.m.
These programs help provide the funds for eligible Oswego County businesses large and small to secure the funding and incentives they need to expand and grow. The programs can also be used to help a business remain competitive, thereby helping to secure and retain jobs in the county.
In an effort to continue to support manufacturing growth in Oswego County, COIDA has developed plans and acquired land on the former Nestlé site in the city of Fulton for a start-up manufacturing facility. It will always house one or more small manufacturers and give them space to establish themselves or to grow. The intent is for them to graduate from the start-up facility and expand into their own building in Oswego County.
COIDA has also contributed to continued manufacturing growth in Oswego County by purchasing 185 acres of land adjacent to the existing Oswego County Industrial Park in the town of Schroeppel. The purchase doubled the size of the industrial park, which was near capacity, and will provide the necessary space and infrastructure for larger industrial projects.