Should I Finance My Organization Through Bonds, Loans, or Grants?

by May 11, 2020Updates17 comments

Without adequate financing, most businesses won’t succeed. In fact, the National Small Business Association (NSBA) found that 35% of small businesses won’t be able to expand if they don’t secure enough funding. Moreover, an additional 20% would have to reduce the number of people on their team.

Depending on your industry and credit rating, your financial options may include issuing bonds, taking out loans, or applying for grants. Before your company makes any financing decisions, you should understand your options.


Loans are the most common source of financing for businesses. In fact, the NSBA found that 64% of small businesses secure funding through loans. Depending on the size of your organization and your financial needs, there are loans available through local banks and the redevelopment authority.

If you are located in the Corry and Union City area, consider contacting the Corry Redevelopment Authority for revolving loan options. Our local programs provide low-interest loan financing for land and building acquisition, construction and renovation, and machinery and equipment purchase and refurbishing, resulting in the creation or retention of jobs. Furthermore, if your business is looking to create new jobs or clean up a local brownfield, you may be able to apply for government loans. Reach out to the Corry Redevelopment Authority for assistance with these programs.


How Do Terms Work?

Although loans can have a higher interest rate than bonds, they can be a secure source of funding. For instance, a loan payment will be the same every month, and there isn’t a large payment at the end of the term. Therefore, your business will be able to create a more predictable budget.

One of the main reasons businesses have difficulty acquiring loans is because banks often require collateral to get a low-interest rate. However, your local redevelopment authority can help you apply for federal, state, and local funding, such as a forgivable loan, that doesn’t need collateral.


Forgivable Loans

There are loans available through government agencies, businesses, and nonprofits that the borrower doesn’t have to pay back—if they meet the requirements. For example, the organization could offer a $5,000 “loan” per employee that is hired. If you are able to retain those employees for five years, you don’t have to repay the loan.

In some ways, it transforms into a grant. However, if your business had to let two employees go, you may have to pay back the $10,000 plus the interest. That being said, if you are a growing business and you need to hire new employees anyway, forgivable loans are a great option.


Government Grant Programs

Some of the best options for your organization are grants awarded by the federal, state, or local government. Grants are different from bonds and loans because they don’t need to be repaid. Businesses and nonprofits alike that are providing public services or helping to stimulate the economy may be eligible for this assistance.

Government grants are competitive and have strict requirements. If your company is in Pennsylvania, the DCED provides information for several government grants. Furthermore, by contacting the Corry Redevelopment Authority, we can help you apply for all the subsidies for which you meet the requirements.


Utilize Your Resources

We understand that securing adequate finances can be the most challenging aspect of driving your organization forward. That’s why the ECRA is here to help you receive funding. Whether your goal is to build a facility or purchase new property, we can help you determine which financing option is best for your organization. If you’re interested in learning more, click here to contact us today.

Grow your business.

Contact us today to discuss how Corry Redevelopment Authority can assist your business improvement, expansion, growth, and advancement.