Financing Programs of the Commonwealth of Pennsylvania
The Commonwealth of Pennsylvania provides a wide
variety of financing programs for business development
and expansions. The following is a list of the more frequently used programs. Contact us for more information and assistance with these programs.
Pennsylvania Industrial Development Authority (PIDA)
The PIDA provides low-interest loans and lines of credit for eligible businesses creating or
Eligible Businesses with 100 or less full time employees:
• Hospitality – Lodging Enterprise – must have five full-time employees at time of application
• Hospitality – Food Service Enterprise – must have been in operation for five years and have five full-time employees
• Defense Conversion
• Recycling – other than organic waste
• Computer Related Services – computer training providers are not eligible
• Construction – 80% or more of income must be derived from new business construction
• Child Day Care – a licensed or to-be licensed for-profit or non-profit facility caring for seven or more children (not relatives)
The maximum loan amount for the businesses listed above is $400,000 or 50% of eligible project costs, whichever is less
• Service Business – the maximum loan amount is $200,000 or 50% of total eligible project costs, whichever is less
• Research & Development Enterprises – the maximum loan amount is $2 million or 50% of the eligible land and building costs; $400,000 or 50% of total eligible machinery & equipment, whichever is less
Other Eligible Businesses:
• Agriculture Processor – converting a farm product into a marketable form
• Industrial Enterprise – will have at least 25 full-time jobs within three years
• KIZ Company
The maximum loan amount for the businesses listed above is $2 million or 50% of the eligible land and building costs; $400,000 or 50% of eligible machinery & equipment costs, whichever is less
• Agricultural Producer – must operate 10 contiguous acres or have yearly gross income of at least $1,000. The maximum loan amount is $400,000 or 50% of total eligible project costs, whichever is less
• Coal Mining – the maximum loan amount for machinery & equipment is $400,000 or 50% of total eligible project costs, whichever is less
• Developer – for multi-tenant facility projects that will house two or more eligible businesses with one not occupying more than 80% of the building. The maximum loan amount is $2,250,000 or 50% of the total eligible land and building cost, whichever is less, if the loan is secured by a first mortgage or 40% of the total cost if secured by a second mortgage.
• Export Related Businesses having 250 or fewer employees are eligible for working capital lines of credit and accounts receivable lines of credit. The maximum amount available for exporting activities is $350,000 (no match is required)
• Land and building acquisition
• Building construction or renovation
• Machinery and equipment purchases
• Working capital lines of credit and accounts receivable lines of credit are available to any eligible business having 100 or fewer full time employees ($100,000 maximum and no match is required except a 50% match for service enterprises)
• Loan amounts will vary based on factors such as eligibility and the number of jobs to be created or retained
• The interest rate will be established at the time of approval and fixed for the term of the loan
Pennsylvania Economic Development Financing Authority (PEDFA)
The PEDFA program provides competitive interest rate financing to businesses by issuing tax-exempt and taxable bonds. PEDFA can fund 100% of project costs, including, but not limited to:
• New equipment
• Working capital
For-Profit businesses and Non-Profit 501(c)(3) business are eligible to apply.
The minimum PEDFA loan amount is $400,000.
PEDFA bonds typically provide interest rates below the rates charged by Commercial Banks.
Borrowers seeking bond financing through PEDFA generally must secure additional credit enhancement for the bonds, such as a bank letter of credit. PEDFA bonds typically provide interest rates for borrowers that are well below interest rates charged by commercial banks.
Pennsylvania Minority Business Development Authority (PMBDA)
PMBDA offers low-interest loans to businesses that are owned and operated by ethnic minorities. There are minimal restrictions on the type of businesses that may apply for loans. Interest rates are 50% of the prime interest rate, but not less than 4%. Maximum loan amount is generally $500,000 (or $750,000 if the business is located in a designated Enterprise Zone), or 75% of total eligible project costs, whichever is less. For retail or commercial firms, the maximum loan amount is generally $250,000 (or $750,000 if the business is located in a designated Enterprise Zone), or 75% of total eligible project costs, whichever is less. Interested applicants should contact PMBDA for current interest rates.
Industrial Site Reuse Program (ISR)
The ISR program provides grant and low-interest loans to companies, private real estate developers, and municipalities to perform environmental site assessment and remediation work at former industrial sites.
• Funds may be used 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.
• No financing is available to companies or others who have caused the environmental contamination on the property.
Contact us today to determine if your project is eligible.
Additional information about these and other Pennsylvania programs is available on the NewPA website, under Business Assistance.