Revolving Loan Fund

Program Summary

Small Business First

This new program, effectively July 1, 1996, provides low interest loan financing to small businesses (generally, 100 employees or less) for land and building acquisition and construction, machinery and equipment purchases and working capital. The program also provides financing for small businesses that need to come into compliance with environmental regulations or that are involved in municipal or commercial recycling. The program also provides financing for small businesses impacted by defense conversions. Maximum loan amount is $200,000. Interest rate is 5%. Companies must agree to create or preserve jobs as a condition of financing.

Pennsylvania Economic Development Financing Authority

PEDFA serves as an issuer of tax exempt and taxable bonds, both in pooled transactions and as stand alone transactions, on behalf of Commonwealth businesses, non-profits and municipalities. Minimum project amount is $400,000. Borrowers seeking bond financing through PEDFA generally must secure additional credit enhancement for the bonds, which may involve a bank letter of credit.
PEDFA bonds typically provide interest rates for borrowers that are well below interest rates charged by commercial banks.

Machinery and Equipment Loan Fund

The program provides low interest loan financing to manufacturing and industrial companies to acquire and install new and used machinery and equipment or to upgrade existing machinery and equipment. Interest rates vary from 2.75% to 3.75% depending on county and municipality un-employment levels. The maximum loan amount available is $500,000 or 50% of the total project
cost, whichever is less. There is no restriction on the size of the business which may access these funds. Companies must agree to create or preserve jobs as a condition of financing.

Opportunity Grant Program

This new program, effective July 1, 1996, provides grant funds to companies or on behalf of companies that will create or preserve jobs within the Commonwealth. The Program is intended to deal with significant projects that offer substantial economic impact either for the Commonwealth as a whole or for the locality or region in which the company will locate. Opportunity Grant funds
may be used to finance job training, infrastructure, land and building improvements, machinery and equipment, working capital and environmental assessment and remediation. This program is marketed exclusively through the Governor’s Action Team.

PennCAP

This program provides a loan guarantee through participating banks for businesses seeking to obtain commercial financing. The maximum limit for a loan guarantee is currently $200,000; this is expected to increase to $500,000 in the near future. No restriction is placed on the category of business that may apply for the loan guarantee. The business applies for a loan directly with
the participating bank of its choice.

Job Creation Tax Credits

This new program, effective July 1, 1996, will provide a $1,000 tax credit to approved businesses that agree to create or preserve new jobs in the Commonwealth within three years. A business must agree to create at least 25 new jobs equaling at least 20% of the existing work force. Twenty-five percent of the tax credits allocating each year must go to businesses with less than 25 employees.
The tax credits may not be utilized by a business until the jobs are actually created.

Pennsylvania Minority Business Development Authority

PMBDA offers low interest loan financing to businesses which are owned and operated by minorities. Interest rate is one half of prime but not less than 4%. Maximum loan amount is $500,000 depending on whether the business is located in a targeted area and the nature of the business. There are minimal restrictions on the type of businesses that may apply for loans. PMBDA also operates loan guarantee program similar to PennCAP but targeted toward the minority business community.

Customize Job Training

This program provides grant funds to businesses, through local education agencies, to develop and provide specialized job training to newly hired employees. Funds are to support the development of training activities that will enable businesses to improve efficiency and to better compete in the global marketplace. Grant funds can be provided on a matching basis for preservation and upgrading
of jobs that would otherwise be lost.

Industrial Sites Reuse Program

This program, also known as the Brownfields Program, provides grant and low interest loan financing to companies, private real estate developers, and municipalities to perform environmental site assess ment and remediation work at former industrial sites. No financing is available to companies or others who caused the environmental contamination on the property. Funds may be ued to finance up to
75% of the cost of an environmental assessment or remediation, not to exceed $200,000 for an assessment and $1 million for remediation. Recipients of funds under this program may receive special consideration under other financing programs.

Infrastructure Development Program

This program provides grant, and low interest loan financing to municipalities, economic development organizations, and other sponsors to finance the construction of public and private infrastructure needed in order for a business to locate or expand at a specific site. The program also provides financing for infrastructure costs necessary for the redevelopment of former industrial sites, including
site clearance and cleanup costs. Maximum amount of financing per project is $1.25 million. Companies or developers must agree to create jobs as a condition of financing.

Click here for more information on the Revolving Loan Fund program or to request an application.