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March/April 2015 Newsletter



FrontDeskScaled Josiah_Lewis_images_NEDCO_DSC5317_edited Josiah_Lewis_images_NEDCO_DSC5359_editedMotel 6 Wilkes-Barre

Northeastern Economic Development Company (NEDCO) was pleased to announce the completion of a 2013 Small Business Administration (SBA) funding for a new hotel in Wilkes-Barre, PA.  NEDCO joined First National Community Bank in securing funds to enable Hotel Squared, LLC to construct a 78-room Motel 6. With this great location on Schechter Drive in Wilkes-Barre, right off Interstate 81 and the Exit 168 interchange, Motel 6 is in the perfect location to surrounding shopping plazas, chain restaurants, and the Mohegan Sun Arena. This Motel 6 features interior corridors, bus parking, coin laundry machines, elevator, free Wi-Fi, and allowance of pets. “With the help of First National Community Bank and Northeastern Economic Development Company, we were able to make this vision a reality and work with people who have always put our best interest first” is what Rakesh Patel, Managing Member of Motel 6, had to say about his 504 experience.

NEDCO is a Certified Development Company (CDC) that specializes in economic development projects in Northeast Pennsylvania.  The SBA 504 loan program is a long-term financing tool, designed to encourage economic development within a community. The 504 Program provides small businesses with long-term, fixed-rate financing to acquire major fixed assets for expansion, modernization, and job creation.  Call NEDCO today (570-457-6726) to receive more information about how we can assist in matching you with an SBA program to service your small business needs.
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January/February 2015 Newsletter


Northeastern Economic Development Company

2014 Review and 2015 Outlook

Stephen Ursich, Executive Director, of Northeastern Economic Development Company (NEDCO) is pleased to announce that NEDCO has recently completed a very successful 2014 calendar year. In 2014, NEDCO saw an increased volume and ultimately had 8 loans approved by the SBA totaling $9.4 million. That increases NEDCO’s portfolio to include 36 loans totaling $23.2 million, an increase of $11.2 million since the beginning of 2014. In addition, at the end of 2014, NEDCO had four loans pending SBA approval, which total $2.7 million. These projects helped to create 131 new direct jobs and the retaining of 105 jobs in the local economy. “Access to capital at a fair interest rate and the jobs that these small businesses create are key to what we do at NEDCO,” said Mr. Ursich. “Without the use of the SBA 504 program, some of these projects may not have occurred”.

In 2015, Mr. Ursich continues to see NEDCO having solid growth in their 504 loan volume.  Mr. Ursich states: “We continue to receive a great deal of interest in utilizing the 504 Loan program to assist companies in their projects.  We continue to work with a diverse group of small businesses that are looking to see how they might best start and expand their businesses. We expect NEDCO to see real strong growth in 2015 in this area.”  Have a loan or want more information? Call NEDCO today (570-457-6726) or visit our website.  Remember, here at NEDCO, we make it happen.

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December 2014 Newsletter

NEDCO Spotlight: Freckles & Frills Learning Center of Scranton, PA

TARA A. BURNS – JUNE 19 2014, 12:04 PM ET
Northeastern Economic Development Company (NEDCO) is pleased to have partnered with Fidelity Deposit Discount Bank in granting an SBA 504 loan to Freckles and Frills Learning Center of Scranton, Pennsylvania.  In 2011, the funds were put to work on the expansion and development of their facility.  With the help of the SBA and NEDCO, Freckles and Frills was able to secure the credit necessary for the purchase of an additional building and remodeling costs under the direction of Elizabeth Keiper.  The project was completed in September of 2013 and has been a tremendous success for our community.

Since its establishment as a nursery school in 1977, it has grown to become a full service child care and early learning center.  It currently provides high quality child care to children ranging from 6 weeks to 12 years of age.  Freckles and Frills Learning Center has developed an excellent reputation over the past 35 years.  They have grown to become one the of premier child care centers in the greater Scranton area.

“Freckles and Frills is licensed by the Department of Education, the Department of Public Welfare and is a Keystone Star 4 designated site.”  NEDCO is proud to have been a part of positively impacting, perhaps, the most important members of our society and the future of our community: our children.  It is NEDCO’s mission to promote development and cultivate lasting relationships with small businesses in our area.  Let us help you imagine a better tomorrow.  Call NEDCO today (570-457-6726) to receive more information about how we can assist in matching you with an SBA program to service your small business needs.

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June 2014 Newsletter

NEDCO Spotlight:  Kingsley ShopRite of Broadheadsville, PA
STEVE URSICH – TARA A. BURNS – MAY 27 2014, 10:04 AM ETNortheastern Economic Development Company (NEDCO) is pleased to announce the completion, as of July 2013, of Small Business Administration (SBA) funding for their largest project to date.  In 2011, NEDCO partnered with Wayne Bank and several other local lenders to complete the relocation and expansion of the ShopRite of Broadsheadsville.  The project combined traditional bank financing and SBA 504 funds to construct the 95,000-square-foot shopping center. The new location now boasts the largest ShopRite location in the world.  In addition to the expansion, the project saw the creation of nearly 200 jobs, with the location now employing nearly 450 local employees.  Christopher Kingsley, Vice President/General Manager, was satisfied with his experience in receiving SBA 504 loan funding through NEDCO:  “The assistance from NEDCO and the SBA was very important to seeing this project come together and ultimately being completed” said Kingsley.  “Our family is very pleased to offer such a beautiful shopping experience to our customers, and it may not have been possible without the help of NEDCO and the SBA.”NEDCO is a Certified Development Company (CDC) that specializes in economic development projects in Northeast Pennsylvania.  The SBA 504 loan program is a long-term financing tool, designed to encourage economic development within a community. The 504 Program provides small businesses with long-term, fixed-rate financing to acquire major fixed assets for expansion, modernization, and job creation.  Call NEDCO today (570-457-6726) to receive more information about how we can assist in matching you with an SBA program to service your small business needs.
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What to do if a Financial Crisis Hits

Crisis strikes every business at some time, and many times, it’s completely unexpected. However, those companies that react the best to a crisis often become tomorrow’s leaders.
However, if you find your company in a financial crisis, what do you do?

Here are some tips:

  • Relax and think. We live in a reactionary society. For whatever reason, most people wait for something bad to happen, get wound up emotionally, and then make a rash decision they end up regretting. Rather than following that path, let your emotions pass, calmly analyze the situation, and then start making decisions based on the reality you face, not on what you feel.
  • Proactively plan. You can’t plan for every possible scenario, especially if you’re getting to know a new business. But, if you are the type who is able to think ahead, do it and prepare for disaster. If you’re not, begin to develop this habit and consider what scenarios could happen in the near future for your business based on what’s happening right now and your experience in the past. If you are already prepared to handle a crisis, you may be able to quickly snatch up market share while your competitors figure out what hit them.
  • Don’t blame yourself or anyone else. Blame literally never helps. Try as you might, and as smart as you and your top employees are, every business goes through near catastrophe at some point. Blaming might make you feel better, but it does nothing to help your business move forward. The first of the order of the day is to get your business back on the right track, and the second is to figure out what went wrong and how to avoid it in the future.
  • Make sure your credit is good and you have available capital. Just in case you need to borrow, make sure you have a good credit score and capital available to you. This could be a 504 loan that we offer, reserve cash from recent profits you generated, your personal cash, or money you borrow from friends or family (although you should avoid this if at all possible). Just in case the worst happens, you want to be ready so you can get access to money and keep your business operations flowing as smoothly as possible.
  • Learn from what happened and avoid thinking of it as a “failure.” Once you get past the storm, analyze what went wrong and why you think it happened. Viewing the situation as a personal failure or a failure of someone else’s causes only judgmental feelings and negative thinking. Looking at the situation as an opportunity to learn, however, helps you prepare and makes your business stronger moving forward.

Enjoy Your Position Ahead of the Pack

Follow these tips during a time of crisis, and you might find yourself ahead of other businesses that react rashly. Few companies choose to think ahead – most react quickly to what just happened.

Should You Use Funds from an Angel Investor?

Let’s say you got a really exciting business idea, and you’re considering the many different ways you could use to acquire capital to get your business growing. Some of those sources could include:

  • 504 loans
  • Bank loans
  • Your own cash
  • Funds from family and friends
  • Crowdfunding websites like Kickstarter
  • Angel investing

But, is angel investing really a good source of funding for you and your business? Check out these pros and cons.

Pros of Angel Investing

  • You get money – If you need it and you’re happy to offer some equity in your company, angel investing may be a good choice for you. Getting access to capital at critical times during the early years of business can help you grow ahead of the competition early on.
  • You get smaller amounts – If you need less than half a million dollars to move your business forward, angel investing again may be the right solution. Venture capital typically seeks larger, more established businesses with consistent revenues already in place.
  • Flexibility – If the bank is too stubborn to give you access to money, angel investing may instead be the best solution. Angel investors are investing their own money, which means you can typically structure the deal in just about any way you and the investor agree to.

Cons of Angel Investing

So now you know the pros – let’s take a look at the cons:

  • Can cause more problems than it’s worth – If the investor is only interested in making money, they may be less patient and unwilling to offer any mentoring to you during the formative years of your business. Because “angel investor” isn’t an often advertised position or type of company, finding one and getting an accurate idea of its character can prove difficult.
  • May want a large share of your business – Angel investors may want to own 10% or more of your business. They view this as reasonable because they know investing in a young, unproven business carries a higher level of risk. In addition, they also know your access to other sources of capital is limited, which they can use to their advantage.
  • You may lose control – Depending on the investor, you may have to give up some of the control of your company. What you started and envisioned may no longer become a reality. This is particularly frustrating if the angel investor doesn’t have experience in your industry. It is, however, a reality of angel investing.
  • Rarely invest again – One-and-done is usually the rule with angel investing. Because it’s risky to buy a stake in a young company, an angel investor may not want to provide more capital should it become needed later on. You may have to find another investor and give up more control of your company, or search out another funding source.

So, Should You Do It?

Ultimately it’s up to you, but do be aware angel investing carries with it a number of inherent risks.

A 504 loan provides a low-interest, non-invasive alternative to angel investing for certain business types. If you need access to capital to grow now, consider contacting NEDCO to learn more.

How to Get the Most Out of Your Employees

Are people or finances your company’s greatest asset? Some great business leaders would argue one, some the other, and a few might say “both.”

Whatever your viewpoint is, you want to make sure you get the most out of them, but there are many different opinions on that also.

Here’s our take on how to do that:

  • Hire only self-motivated employees. Don’t worry too much about motivating your employees. You should provide incentives for desirable behavior and standards for acceptable workplace behavior, but you shouldn’t have to motivate them. You might have to for periods of time, but if they clearly can’t motivate themselves consistently, then it’s time to try someone else.
  • Reward desirable behavior. Use a mix of financial incentives and recognition techniques such as verbal praise and paper awards. Remember, you get more of what you focus on, so spend most of your time focusing on reinforcing what employees do well.
  • Focus on what they do well and forget about the rest. If you focus on the problems an employee is causing, that’s acceptable up to a point because they need to know what doesn’t work well at your company. However, if you spend too much time focusing on what your employees don’t do well, you’ll get more of it. Learn to let the little things go, as long as they do most things right.
  • Compensate them well – You may be able to justify lower wages in your mind, but make sure you know market rates for the positions where you need employees. Then, ensure you pay above those rates.

    First, this will help you attract the most talented employees who know what type of salary they command and will stay at workplaces that reward them. Second, employees who know they are compensated at an above average rate will work much harder for you. In the long run, this also reduces turnover and hiring costs substantially.
  • Fire quickly if it’s not a good fit – If you have what you know is a good employee but things aren’t going well, try them out 1-2 different places in your company first. If you know you made the wrong hire shortly after beginning a new working relationship, fire quickly. Major problems don’t get better. If there’s wrinkles though, make sure you give it a little time to work out – there’s bumps in almost every relationship at the beginning.

Enjoy Better Productivity and a Healthier Bottom Line

It can be tempting to think you’ll make more money if you reduce salaries and cut every corner, but quite the opposite is true – the more you give, the more you get. Treat your employees well and (in most cases), they’ll treat you well. Ultimately, your profit margins will reflect your wise decision making.

How to Protect Your Small Business’s Assets from Creditors During Bankruptcy

According to the SBA, 60,837 businesses filed for bankruptcy in 2009. Starting and running a successful business, no matter how experienced or talented you are, will be one of the most difficult endeavors in your life.

Remember that no matter how far in debt you go, bankruptcy is always your choice. You don’t have to file it unless you really think it’s time to start over.

If you do fall on hard times and bankruptcy appears as the best option, follow these tips ensure you protect your assets to the maximum extent possible:

  • Consult with a Lawyer
    This is by far the best advice to take away from this post. Ultimately, only a lawyer practicing in the jurisdiction where you do business can tell you exactly what you need to give yourself maximum protection. However, you can take additional steps that generally work in all jurisdictions to keep your business protected.
  • Don’t Mix Business and Personal Assets

    This doesn’t guarantee your business assets will remain safe from bankruptcy. But, it does give you the best chance that at least your personal assets will remain safe from creditors.

  • Act Before You Receive a Judgment If you receive a notice in the mail stating a creditor successfully levied a judgment against you, it’s too late. At this point, the damage is done. If you make any monetary transfers to protect your assets, courts could declare them to be fraudulent. This means your creditors could take additional action against you.
  • Act Quickly and Initiate DiscussionsIf you act first in bankruptcy and appear as though you are doing everything possible to repay your debts, your creditors are more likely to strike deals with you. There’s no written rule or legislation guaranteeing this, but it helps tip the odds in your favor.
  • Structure Your Business Properly (Hint: Avoid a Sole Proprietorship)A sole proprietorship is your default business structure if you don’t report one to your state or the Federal government. As an individual, you own all debts and assets of the business, which means your personal assets are at risk during bankruptcy. A partnership, LLC, or corporation protects your personal assets in part from a business bankruptcy.
  • Convert Non-Protected Assets to Protected Ones Before You FileThis has to be done in a very particular way, so if you’re considering bankruptcy, think about contacting a lawyer who can tell you exactly how to do this in your jurisdiction. Where you put assets in order to protect them can differ markedly from state to state.
  • Thinking Ahead is Key Remember, by thinking ahead and acting before you actually file bankruptcy, you put yourself in the best position for protecting your assets. Do this as far possible in advance and make sure you contact a lawyer as soon as possible!

How to Differentiate Your Business

Let’s face the reality of any industry – there’s a ton of businesses in any industry, and almost every one of them offer the very same thing, or a very similar thing. What attracts the attention of consumers is talking about the same thing in a very different way.

Even if you don’t talk about the same thing in a different way, your business can still do very well. But if you can find a different way to talk about doing the same thing, you can shoot yourself to the
top quickly.

So what can you do to truly differentiate your business from the competition? Here are some tips to get your mind going in the right direction:

      • Understand what different is in the eyes of a consumer – Being a “full service” firm or discussing the fact you do things “differently” isn’t enough to convince anyone that you truly are different. Talking about your business in this way does help build its identity, but it doesn’t make you remarkable.
        Voodoo Doughnuts, located in Portland, Oregon, has long lines lasting until 1-2 a.m. They do the same thing as many other bakeries – they make tasty, sweet donuts. But, they make each donut with an incredibly wacky design that makes them new and interesting. It’s just an example of how to do the same thing differently.
      • Research like crazy – If you don’t have a ton of experience in your chosen industry, make sure you research your space well, which ensures you know your competition. The more you know the big picture in which you compete, the more likely it is that you can develop a new way of doing the same thing that captures attention.
      • Exist on the edge – You’ll notice extremes in the industry in which you compete. For example, in the auto industry, some cars are targeted at people who love big, powerful vehicles, while others are very small and are aimed at fuel efficiency. In your industry, learn what the extremes are, and make it your mission to exist on one of them.
      • Always test new ideas on the side – Some people think once you find out what works, do more of it. That type of thinking certainly makes sense. But, especially in today’s rapidly changing society, what works changes very fast. Make sure you dedicate at least part of your budget to testing out new and different ways of doing things. Remember that most of it won’t work, but when some of it does, you may unleash a flood of opportunity.

Any Ideas Come to Mind?
Given all of this information, has anything exciting come to your mind? If not, one thing is true when owning a business – if you set your mind to it, good things will happen.