Significant program enhancements have been made to the Pennsylvania Industrial Development Authority program, which offers low-interest loans and lines of credit to eligible businesses that commit to creating and retaining full-time jobs.
The changes include an increase in the lending limit for machinery and equipment loans funded by PIDA’s Machinery Equipment Loan Fund (MELF) program. Lending was previously capped at $400,000, but that cap has now been increased to $1.5 million.
The state also is offering a low fixed 2 percent interest rate for the full term of the loan for any PIDA borrower whose loan application is received on or before December 31, 2017. The new 2 percent interest rate will last until Jan. 1, 2018 or until certain lending thresholds are met, after which interest rates will be set using a traditional spread above the 10-year treasury.
In addition, PIDA added an option to its flagship real estate loan resource allowing for the extension of amortizations on these loans out to 20 years, where the program previously only offered terms and amortizations of 15 years.
“These changes are welcome, as they make PIDA’s machinery and equipment offering relevant to larger projects,” said John Kingsley, Lehigh Valley Economic Development Corp.’s Vice President of Finance.
“And the longer amortization option brings PIDA’s real estate financing program in line with its commercial lending counterparts,” Kingsley said. “With rates starting at just 3 percent, these programs have simply become an even a better option.”
“PIDA has really been trying to improve their loan offerings over the last several years,” Kingsley said. “Not only are they even better incentives for our local companies to expand and grow, but the organization itself has become so accommodative in their process that getting a loan through PIDA is easier than ever.”
The Lehigh Valley Economic Development Corp. and its affiliates have helped more than 150 Lehigh Valley companies receive PIDA loans. For more information, contact the LVEDC Finance Department at 610-266-6775, or fill out a Financial Inquiry form on the LVEDC website.
The MELF program applies to projects where PIDA is financing machinery and equipment acquisitions for eligible manufacturing, industrial, biotechnology, and computer-related service enterprises.
Lending under the MELF program requires a 50 percent match, and loans funded are subject to the job retention/creation requirements of one full-time job retained for every $35,000 loaned, and/or one full-time job created for every $50,000 loaned.