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Hagerstown to use state grant to offer low-interest loans to businesses

June 28, 2013|BY HOLLY SHOK | holly.shok@herald-mail.com

The city of Hagerstown will receive a $150,000 state grant that will be used to offer low-interest loans to businesses in an effort to redevelop vacant buildings and areas citywide.
 
 Gov. Martin O’Malley on Thursday announced the grant, which is administered through the Maryland Department of Business and Economic Development and will be absorbed into the Hagerstown Revolving Loan Fund.

The city will provide $75,000 in matching funds, according to a news release from the DBED.

The loan fund’s balance prior to the grant and the city’s match was $225,034, but that now has increased to $450,034, city Economic Development Manager Jill Estavillo said Thursday.

“This will allow the city to assist more businesses with more loans through the program,” Estavillo said. “Loan repayments by businesses are made back into the fund, allowing it to ‘revolve,’ and creating the opportunity to issue new loans to help other businesses.”

Estavillo, who applied for the grant on behalf of the city, said in addition to  redevelopment in Hagerstown’s East End and downtown, targeted areas include the former Unilever plant, the former Cascade building and the Harrison land tracts.

Estavillo said program loan amounts range from $10,000 to $200,000, or 80 percent of the total project, whichever figure is less
The HRLF was established in 1982 to assist in the city’s retention, expansion and recruitment of business, the release said.

Loans from the program — which are available to existing, expanding and new businesses — are granted for various purposes that include “assistance for purchases or renovation of a building; the purchase of machinery or equipment; land improvements; building construction; leasehold improvements; micro-enterprise activities, infrastructure improvements and working capital,” the release said. 

The most recent recipient of an HRLF loan is Washington County-based staircase manufacturer Duvinage, which used the $100,000 to assist with the acquisition of Ohio staircase manufacturer Sharon Stairs, Estavillo said.

With the acquisition, Duvinage is slated to invest $400,000, retain 19 employees and add another 25 full-time jobs over the next two years, the release said.

Duvinage President Robert A. Maruszewski has previously said the company’s business plan calls for adding 50 employees over the next five years.

“The State is pleased to support the City of Hagerstown’s Revolving Loan Fund, which is a critical tool to help create and retain jobs,” O’Malley said in the release. “We look forward to continuing to work with our partners in Hagerstown to spur development and provide the resources needed for businesses to grow and thrive.”

Any business interested in receiving more information or applying for an HRLF loan should contact the city Department of Community and Economic Development, Estavillo said.

“As the City of Hagerstown works hard to retain and expand existing businesses and to attract new businesses, we are very grateful for the support of the State of Maryland and DBED in particular,” Mayor David S. Gysberts said in the release. “This is a great example of State and local government collaboration to support existing jobs and create new jobs in Hagerstown."

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