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Milestone move drops interest rates to an unprecedented 1.5 percent

By LVEDC Staff on December 5, 2012

                     

FOR IMMEDIATE RELEASE                                               Wednesday, December 5, 2012

Milestone move drops interest rates to an unprecedented 1.5 percent

BETHLEHEM, Pa. – Dec. 5, 2012 – Lehigh Valley Economic Development Corporation (LVEDC) said today the Pennsylvania Department of Community and Economic Development’s (DCED) recent move to lower interest rates on major financing programs to 1.5 percent is great news for economic development in the Lehigh Valley.

This unprecedented move lowers the fixed interest rate significantly for a number of the Commonwealth’s economic development financing incentives including: the Pennsylvania Industrial Development Authority (PIDA), Machinery and Equipment Loan Fund (MELF), Small Business First (SBF) and the Pollution Prevention Assistance Program (PPAA) programs. These resources are all administered in the Lehigh Valley by LVEDC through its partnership with area loan organizations, Lehigh’s Economic Advancement Project and Northampton County New Jobs Corp.

In addition to lowering interest rates on select programs to the lowest they have ever been, DCED announced that fees charged by the DCED to borrowers, on the programs referenced, will be waived. The new rates will initially be in place through March 31, 2013.

“Providing capital through low-interest loans to assist Lehigh Valley companies is absolutely critical to facilitating economic development and job growth,” said Don Cunningham, president and CEO of LVEDC. “This decision by DCED is a very positive move to make it even more affordable for quality businesses to expand and grow their operations.”

The move comes at a time that LVEDC is improving and expanding its Finance Division to make capital available to businesses looking to expand or locate in the Lehigh Valley.

“We will be adding a finance person to our staff next year to help make companies aware of the financing programs available to them and to help them find the right access to capital,” Cunningham said.

Established in 1956, the Pennsylvania Industrial Development Authority program is considered by many to be the Commonwealth’s flagship economic development program and provides low-interest loans for land and building acquisition, building construction and renovation for manufacturing, industrial and other eligible companies. The program can finance up to 60 percent of a total project cost to a maximum loan amount of $2.25 million with a term up to 15 years.

The Machinery and Equipment Loan Fund provides low-interest loans to acquire and install new or used machinery and equipment or to upgrade existing devices. Loans are available up to $5 million or 50 percent of the total eligible project cost for a term of up to 10 years.

The Small Business First loan program provides low-interest loans for land and building acquisition, construction and renovation, machinery and equipment purchases, and working capital to assist certain businesses with fewer than 100 full-time employees. This program can finance up to 50 percent of a total project cost to a maximum of $200,000 for a term of up to 15 years.

The Pollution Prevention Assistance Program provides assistance for small businesses to implement pollution prevention and energy-efficiency projects, enabling these businesses to adopt or install equipment or procedures to reduce pollution, energy usage or raw materials. It funds up to 75 percent of the total project cost or $100,000 for a term of up to 10 years.

These state loan programs provide long-term and low fixed-rates of interest as an inducement to eligible businesses to consider location and expansion and to create and retain employment in Pennsylvania.

LVEDC administers more than one dozen low-interest financing programs that fund real estate, equipment, working capital, workforce training and sustainable development projects.

For more information on all financing programs, please contact John Kingsley, LVEDC vice president of finance, at 610.266.0887 or [email protected].

Lehigh Valley Economic Development Corporation (LVEDC) is a one-stop, full-service business and economic development agency. Created to promote and foster economic prosperity in the Lehigh Valley, LVEDC assists businesses by providing them with regional, economic and demographic information, finance and business incentives, site and facility availability, business networking, and workforce services. By coordinating with state, county, and municipal governments, chambers of commerce, industry organizations, educational institutions and utilities, the award-winning LVEDC streamlines the relocation and expansion process for businesses. Visit LVEDC online at lehighvalley.org.

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