Low Interest Loan Programs Available
- PA Industrial Development Authority -low interest loans. PIDA Fact Sheet: PIDA-FactSheet_2017
- PA Economic Development Financing Authority – taxable bonds
- PA Economic Development Financing Authority – tax-exempt
- Manufacturing Technology Loan Fund – Catalyst Connection
- Small Business Administration – loans and loan guarantees
- Progress Fund –
- Southern Alleghenies Planning and Development loan programs – Loan Program helps businesses maintain and increase their markets and create new jobs.
Bedford County Development Association
BCDA can help to access a myriad of government grant and loan opportunities including Pennsylvania Department of Community and Economic Development programs including:
- One-stop-shop for job creators seeking resources
- Loans are initiated through BCDA
- Provides flexibility and maximizes available resources
PA Industrial Development Authority Loan Programs
- Agricultural Processor
- Agricultural Producer
- Industrial Enterprise
- Research and Development Enterprise
- Hospitality Enterprise
- Defense Conversion Enterprise
- Recycling Enterprise
- Computer-Related Services Enterprise
- Construction Enterprise
- Child Day-Care Enterprise
- Mining Enterprise
- Service Enterprise
- Keystone Innovation Zone (KIZ) Company
- Any eligible businesses (except mining enterprises) for eligible land and building costs.
- Any eligible business (except developers) for eligible machinery and equipment costs.
- Any eligible business (except mining enterprises and developers) having 100 or fewer full-time employees worldwide at the time of application submission or any business who is engaged in exporting activities and has 250 or fewer full-time employees worldwide are eligible for working capital and accounts receivable lines of credit.
- Any eligible business (except mining enterprises and developers) having 100 or fewer full-time employees worldwide at time of application that adopt or install pollution prevention or energy efficient equipment or processes that reduce/reuse raw materials, reduce production of waste, or reduce energy consumption.
- Developers for multi-tenant facility projects involving the acquisition, renovation, expansion or construction of a building that will house two or more industrial enterprises, manufacturing enterprises, R&D enterprises, agricultural processors or producers, with one business not occupying more than 80% of the building.
- Certified Economic Development Organization’s (CEDO’s) for industrial park projects involving the acquisition of land for eventual sale to industrial enterprises, manufacturing enterprises, R & D enterprises, agricultural processors or producers.
Land & Building Loan Amounts
- Agricultural processor, manufacturing, industrial, KIZ Company, or R & D enterprise for land and building costs – $2,000,000 or 50% of the total eligible costs, whichever is less. Projects located in state enterprise zones, state Act 47 municipalities, federal empowerment zones and enterprise communities, brownfield sites, KOZ’s or KOEZ’s are eligible for up to $2,250,000.
- Agricultural producer, hospitality, defense conversion, recycling, computer related services, construction or child day-care enterprise – $400,000 or 50% of the total eligible costs, whichever is less.
- Service Enterprise – $200,000 or 50% of total eligible costs, whichever is less.
- Multi-tenant facility – $2,250,000 or 50% of the total eligible costs, whichever is less, and must be secured by a 1st mortgage.
Machinery & Equipment Loan Amounts
- All eligible businesses (except servicer enterprises and developers) – $400,000 or 50% of the total eligible M&E costs, whichever is less.
- Service Enterprises – $200,000 or 50% of the total M&E costs.
NOTE: For PIDA real estate and machinery & equipment loans $400,000 or less where the eligible business enterprise has 100 or fewer full-time employees worldwide; real estate and machinery & equipment costs incurred within 12 months prior to submission of the PIDA application can serve as an eligible project match.
Working Capital & Accounts Receivable Lines of Credit
- Eligible businesses (except mining enterprises & developers) with 100 or less full-time employees – $100,000. Match is not required, except for service enterprises in which a 50% match is required.
- Eligible businesses with less than 250 full-time employees involved in exporting activities – $350,000. No match required.
Pollution Prevention & Energy Efficiency Loan Amounts
- Eligible businesses completing projects for pollution prevention or energy efficiency including eligible M&E costs – $100,000 or 75% of total eligible costs.
Pennsylvania Industrial Development Authority (PIDA)
Interest Rates – adjusted quarterly
- For Real estate loans financing eligible land and building costs, borrowers will have the following two interest rate options:
1) Fixed interest rate for the full term of the loan (up to a 15-yr. period). This option is calculated using the 10-year treasury yield +150 basis points. Based on the current 10-year treasury yield, the fixed rate option is 3.00% for the life of the loan.
2) Fixed interest rate for a seven (7) year period set at the 10-year treasury rate +50 basis points. After seven years, the rate will reset to the 10-year treasury rate +50 basis points. Please note, the reset rate is limited to a 200 basis point increase/decrease and has a floor of 2.25%. The reset rate is then fixed for the duration of the loan.
- For this option, the rate is fixed for (7) years at 2.25% and will reset to the 10-year treasury rate +50 basis points after the (7) year period. The reset interest rate is capped at 4.25% (200-point increase) with a 2.25% floor and will be fixed for the remaining term of the loan.
- For Equipment loans – 3.00% fixed rate for the full term of the loan.
- For Working capital and accounts receivable lines of credit – 3.00% fixed rate for 12-month period.
- For Pollution prevention and energy efficiency loans – 2.00% fixed rate for the full term of the loan.
Rates through December 31, 2016
- Loans used to acquire land, buildings or to renovate, expand or construct a building may have a repayment period of up to 15-years.
- Loans used for Machinery and Equipment may have a repayment period of up to 10-years.
- Working capital and accounts receivable lines of credit shall not exceed a term of 12 months and can be renewed annually for up to a maximum of six years.
- Loans used to finance industrial park projects may have a repayment term of up to 15-years, whereas interest accrues during the first two years and is due as a lump sum payment at the end of the two (2) year period, monthly interest payments are due for years 3-5, and monthly P&I payments are due for years 6-15.
- Loans used to finance multi-tenant building projects may have a repayment term of up to 15-years, whereas only interest is due for the first two (2) years and monthly P&I payments are due for years 3-15.
PIDA charges a non-refundable loan commitment fee of 1% of the approved loan amount for loans greater than $400,000.
Pennsylvania Economic Development Financing Authority (PEDFA) Tax-Exempt Bond Program
Eligibility: Manufacturing, non-profit, energy, solid waste disposal, wastewater treatment, transportation facilities, assisted living/housing..
Eligible uses: Land and building acquisition, building renovation and new construction, machinery and equipment acquisition and installation, designated infrastructure, tax-exempt bond refunding.
Amounts: Loans no less than $400,000. Up to 100 percent of project costs.
Terms/conditions: 85 percent of prime interest rate. Weekly variable interest rate tied to market for tax-exempt bonds. Up to 30-year term. Borrower generally must secure letter of credit from bank.
Pennsylvania Economic Development Financing Authority (PEDFA) Taxable Bond Program
Eligibility: All types of businesses needing access to low-cost capital.
Eligible uses: Land and building acquisition, building renovation and new construction, machinery and equipment acquisition and installation, designated infrastructure, refinancing, working capital.
Amounts: Loans no less than $400,000. Up to 100 percent of project costs.
Terms/conditions: 95 to 100 percent of prime interest rates. Weekly variable interest rate tied to market for taxable bonds. Term is based upon negotiated letter of credit. Borrower generally must secure letter of credit from bank.
Manufacturing Technology Loan fund – Catalyst Connection
For many manufacturers, identifying and implementing state-of-the-art technology is the first step to expanding their markets, enhancing productivity and quality, remaining competitive and improving their bottom lines.
By providing access to the Manufacturing Technology Loan Fund, Catalyst Connection can help southwestern Pennsylvania’s small-and medium-sized manufacturers obtain the financial assistance required to purchase the technology needed to meet your needs, including technology equipment upgrades or the purchase capital equipment such as:
- Computer hardware and software
- Computer-aided design (CAD) and computer-aided manufacturing (CAM)
- Numerically controlled and computer numerically controlled equipment (CNC)
Download more information: http://catalystconnection.org/finance-programs-for-manufacturing/default.aspx
Small Business Administration 504 Loan Program (SBA 504)
The SBA offers numerous loan programs to assist small businesses. It is important to note, however, that the SBA is primarily a guarantor of loans made by private and other institutions.
Overview: Funding available for expanding business or small business needs; provides growing businesses with long-term, fixed-rate financing for major fixed assets
Uses: Fixed asset financing, plant acquisition, construction, renovation, land and site improvements, acquisition and installation of machinery/equipment.
Funding: Up to 40% of eligible project costs; 50% of financing from private financial institution; Minimum of 10% equity injection (15% if start-up)
Terms: Average after tax profit of not more than $3 million for each of the last 2 years; tangible net worth of not more than $8.5 million; minimum total project cost is about $150,000; and fixed rate and term of 10 or 20 years.
For more information: http://www.sba.gov/financing/
The Progress Fund
Eligibility: The loan program is targeted toward businesses that provide services and/or products to tourists. Recipients have included businesses that provide accommodations, food and fun; and those that reuse and preserve historic sites. We strongly prefer businesses that: 1) create jobs; 2) are located in distressed parts of rural Southwestern Pennsylvania; and 3) can meet repayment terms.
Use of Funds: The Fund’s loans can be used to: Purchase property, including historic property, for business use, Restore and rehabilitate existing structures, Purchase equipment, furnishings and inventory Provide working capital, Supplement other business loans, with approval of the other lender. Financing is not available to retire existing debt.
Interest Rate: Interest rates depend on the risk level of the business. Rates may be fixed or variable and priced above the U.S. Treasury yield for the corresponding term.
Loan Terms: Minimum loan: $20,000; Largest approved loan: $250,000 Typical duration: 5 to 10 years
Collateral: Depending on the level of participation of other lenders, if any, the Fund secures its loans with real estate, fixed assets, inventories, receivables, and, in some cases, personal assets.
General Conditions: At a minimum, the Fund will require the borrower to provide a business plan, financial statements, sales projections, tax returns and personal financial information may be required of principals. For real estate, an appraisal and title review may be necessary.
For more information: http://www.progressfund.org
Southern Alleghenies Planning & Development Commission
Eligible businesses can apply for low interest financing if they are unable to finance projects with conventional loans. Specific terms and conditions vary according to funding source.