Three Maryland firms last week became the first to receive loan approvals under a new umbrella financing program offered by the Maryland Industrial Development Financing Authority. Seventy new jobs are expected to be created by the firms' planned expansions.
The umbrella program is designed to help make low-interest, tax-exempt financing available to small business borrowers. Under the program, the agency will pool small loans and fund them by selling one large umbrella bond on the public market.
In the past, legal procedures and paperwork made the cost of sponsoring small loans virtually prohibitive for MIDFA, although it has acted as an intermediary between borrowers and lenders. With the new umbrella loan program, MIDFA can handle a large number of small loans with only one set of costs and fees.
The financing authority itself now will act as lender, with funds raised from general bond sales. Until the authority can build up a group of loans worth at least $20 million and sell a bond to fund that group loan, banks will finance the loans.
The three loans approved for umbrella financing are:
* $425,000 to PRB Associates Inc., a St. Mary's County computer systems firm. The loan will be used to build an 11,500-square-foot office and light-assembly facility in Hollywood, Md.
* $367,000 to C and C Industries Inc., a Rockville firm that designs, builds and repairs utility trailers. The loan will be used to purchase land to build an 11,750-square-foot manufacturing facility in Gaithersburg.
* $450,000 to Oakland Financial Press Inc. to establish a computerized composing and typesetting facility in Anne Arundel County.