Lending a hand
for small businesses

By Tom Waring
Times Staff Writer

There are about 60,000 small businesses in Philadelphia, and a total of some 250,000 in Southeastern Pennsylvania.
Half of those businesses are home based.
"There’s a huge entrepreneurial spirit out there," said David Dickson, director of the Philadelphia office of the United States Small Business Administration.
Dickson last week visited the Philadelphia Federal Credit Union headquarters at 12800 Townsend Road to officially welcome PFCU as a new SBA-guaranteed lender.
The SBA sets the guidelines for loans to small businesses, while its partners — such as the PFCU — make the loans. The government agency backs the loans with a guarantee that eliminated some of the risk for the lender.
The program assists qualified small businesses to obtain financing when they might not be eligible for loans through normal lending channels.
"A lot of small entrepreneurs are risky for us, and we have to turn them down," said James McAneney, president and CEO of the PFCU. "The SBA guarantee shares the risk. That’s the beauty of this whole partnership."
The Philadelphia Federal Credit Union was founded in 1951 and has been at its Far Northeast headquarters since 1998. Today, it has more than 100,000 members and about $550 million in assets, making it among the five largest credit unions in the Philadelphia area.
The PFCU serves the owners, employees and directors of more than 600 organizations in Pennsylvania, New Jersey and Delaware. A large percentage of the members are non-uniformed Philadelphia municipal employees.
The credit union has 250 employees, including 150 at the main office.
In addition to the Townsend Road location, the credit union has seven branches — one at 8025 Roosevelt Blvd., two in Center City and one each in North Philadelphia, West Philadelphia, Germantown and Bloomsburg.
"We’re looking to expand," said Karen Eavis, vice president of marketing.
The Small Business Administration helps start, build and grow businesses in the United States, Puerto Rico, Guam and the U.S. Virgin Islands.
The SBA was created in 1953 as an independent agency of the federal government to assist, counsel and protect the interests of small businesses, to preserve free competitive enterprise and to strengthen the overall American economy.
The agency guarantees, but does not provide, loans, except in the case of disasters. Last year, the SBA assisted in 110,000 loans that totaled $20 billion.
"That’s a lot of capital being injected into the economy," Dickson said.
Dickson has been on the job for two and a half years. In that time, the number of small businesses in eastern Pennsylvania has grown from 577,000 to 610,000.
In the case of the SBA/PFCU partnership, the government agency provided a plaque, window decals and resource guides, and will also offer technical assistance and training. The guarantee is 50 percent to 85 percent of the loan.
"I’m very pleased to welcome them to the family," Dickson said.
The relationship began when both sides met at a conference at Temple University. The PFCU completed the application process and was approved as an SBA-guaranteed lender.
"It was a good move for us," McAneney said. "It gives us another avenue to make more loans to more small businesses."
Dickson explained that the SBA approved the PFCU as a lender because of its size.
"Looking at their operation, it was a no-brainer," he said. "They’re a good, sturdy financial operation."
Dickson said offering loans to qualified businesses is always a good move, especially at a time when credit is being reined in because of an uncertain economy.
"This will be an excellent thing for the business community," he said. "The loans will help businesses expand and help provide jobs, stability and wealth to communities." ••
Reporter Tom Waring can be reached at 215-354-3034 or twaring@phillynews.com