Pennsylvania Low-Interest Financing Programs Becoming More Accessible and Efficient
By Colin McEvoy on February 23, 2015
Big changes are coming to Pennsylvania’s low-interest financing programs available to help growing businesses, making them easier to access, more efficient in process, and more comprehensive in their eligibility.
More companies than ever before will now be eligible for the Pennsylvania Industrial Development Authority (PIDA) program, which provides low-interest loans for eligible businesses that commit to creating and retaining full-time jobs.
Three existing programs are being brought under the PIDA umbrella, creating a one-stop for business financing in Pennsylvania that will make access these loans far easier and more efficient, said John Kingsley, vice president of finance for the Lehigh Valley Economic Development Corporation (LVEDC), which administers the PIDA program.
“The program has been significantly improved in our estimation,” Kingsley said. “We’ve put some applications in and the process already seems improved and more streamlined. It’s already making a difference.”
Additionally, loan maximums have been increased and eligibility requirements have been broadened, Kingsley said. While it has traditionally been manufacturing companies that have taken advantage of PIDA, now a wide range of companies previously ineligible will be able to do so, most notably service-related businesses.
The PIDA program will now be able to finance real estate, machinery and equipment, and working capital. It will also offer lines of credit at rates as low as 2.25 percent, something that was not available before.
The changes went into effect Feb. 4, and applications are being accepted now. The programs combined into PIDA include the Machinery Equipment Loan Fund (MELF), Community & Economic Development Program, and Small Business First Program (SBF), all of which LVEDC administers.
The changes have also decreased the number of jobs that must be created or maintained as part of a loan application, Kinglsey said. Previously, for every $35,000 of borrowing, one job had to be created or retained. Now, each job created can leverage up to $50,000, and each job retained up to $35,000.
For real estate projects, PIDA can offer fixed rates as low as 2.25 percent for up to seven years, and finance up to 50 percent of a total project cost to a maximum loan of $2 million or more in some circumstances.
For machinery and equipment, PIDA can finance up to 50 percent with loan maximums of $400,000, twice the amount available before. On the working capital side, the maximum loan amount is $100,000.
By combining all these programs into PIDA and having the same processing agent, Kinglsey said applications can now include multiple uses. For example, if a development project also has a machinery need, they can be placed in a single application to be reviewed by one entity.
“The efficiencies are obvious,” Kingsley said.
The changes also give Pennsylvania Department of Community and Economic Development staff the ability to make lending decisions on certain PIDA loans. Kingsley said loans under $200,000 can now be approved at staff level, which expedites the process because it does not depend on the schedule of the PIDA board, which meets monthly.
Click here for more information about loan programs administered by LVEDC. For more information, contact Kingsley at 610-266-0887 or [email protected].
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