Low-interest bond financing for land and building acquisition,
construction and
renovation, resulting in the creation or retention of jobs. Offered
locally
through the Greater Erie Industrial Development Corporation, the
program can be
used to finance industrial development projects for manufacturing,
industrial,
and research & development enterprises. By providing financing for
these
projects, PIDA’s mission is to strengthen Pennsylvania’s economy and
create
jobs in the wealth-generating private sector.
PIDA funding fills the financing gap between bank
financing and
your organization’s equity. PIDA can finance up to 50% of the total
project
cost with a maximum of $1,750,000 set depending upon the location of
your
project. Offers special low-interest rates for those firms located in a
designated Enterprise Zone, Keystone Opportunity Zone, Brownfield Sites
and
Financially Distressed Municipalities under PA Act 47. Advanced
technology
companies also receive a lower interest rate.
As of July 1, 2003, PIDA loan participation and interest rates for
firms in Erie
County are:
Small Businesses (Less than 50 Employees) 50%
Large Businesses 40%
Interest Rate (Fixed) 2.75%
Loan Ceiling up to $1,250,000
Participation and interest rates are subject to change by PIDA.
PIDA normally matches the bank’s term, up to 15 years. For strong
credit
companies, PIDA subordinates its loan to the new lending of the bank.
At least
10% of each project must be owner’s cash equity or other funds
subordinate to
PIDA. Loans are guaranteed to PIDA by the sponsoring non-profit
industrial
development corporation.
Machinery and
Equipment Loan Fund (MELF)
Machinery and Equipment Loan Fund (MELF): Low-interest
loan
financing to acquire and install new or used machinery and equipment,
or to
upgrade existing machinery and equipment.
Loans can be made for machinery and equipment acquisition and
upgrading, and
related engineering and installation costs directly related to the
operations or
processes. Businesses in the manufacturing, industrial, agricultural
processing
or mining industries are eligible to borrow up to $500,000 or 50% of
the total
eligible project costs, whichever is less. Interest rates may be as low
as 3.75%
for up to a 7-year term, depending upon the useful life of the
machinery being
financed. A 10% equity investment by the company is required.
Additionally, one
job must be created for every $25,000 loaned.
LERTA (Local
Economic Tax Revitalization Abatement):
The LERTA program is available in many communities
throughout
Pennsylvania. Within the City of Corry, the taxing bodies have adopted
an
abatement program for certain improvements to deteriorated property
(industrial
and commerciall) and new construction of industrial and commercial
structures.
The exemption period is up to five (5) years for all zoning districts
designated.
This program is offered to encourage business expansion that may
encompass the
reuse of existing buildings, or construction of new facilities. Tax
abatement
relates directly to improvements that would cause the existing tax
assessment of
the property to change, thereby increasing the City, School and County
real
estate tax. The property/business owner will still pay a base amount of
tax
based on the existing assessment during the five (5) year time-frame.
In the instance where new construction takes place on a vacant lot, it
becomes
an ‘improved’ lot, therefore the land tax will increase and be
assessed,
however, no taxes will assessed for the improvement constructed thereon
until
after the LERTA terminates.
Customized Job
Training (CJT)
The Customized Job Training Program
(CJT)
supports the needs of employers to provide customized training to their
employees. The program also promotes business and educational
partnerships in
the development and implementation of industry-specific curricula.
Eligible applicants include any business, except point-of-sale retail
businesses. CJT funds may be used by a Pennsylvania company to train
employees
for job-specific skills. Eligible uses of CJT funds include:
Salaries and fringe benefits for instruction and curriculum development.
Supplies and consumable materials.
Reasonable travel expenses.
Communication costs, such as telephone, postage and printing.
Tool and equipment rental directly applicable to the training project.
Administrative costs.
Instructional software.
Tuition reimbursement.
Trainees must be making 150% of minimum wage, when applicable. No
awards will be
approved for more than two successive fiscal years and for no more than
3 out of
every 5 fiscal years.
Eligible private companies must meet the following conditions:
Must either be a start-up, existing, expanding or relocating their
operations at
a Pennsylvania site.
Trainees should be verifiable Pennsylvania residents.
Trainees who successfully complete the CJT program must fill all
entry-level
positions and upgraded positions identified in the training plan.
Reimbursement is at 75% of total project cost with 25% private cash
match.
Guaranteed Free
Training Program Administered by the Workforce
and Economic Development Network of PA (WEDnetPA):
The Guaranteed Free Training Program provides workforce
development grants for basic skills and information technology training
for
eligible Pennsylvania businesses and their employees.
For basic skills training grants manufacturing or technology-based
businesses
may apply. For information technology training grants front-line
employees and
supervisors of manufacturing companies are eligible for applied
manufacturing
technology training. Information technology professionals of any
company, except
point-of-sale retail businesses, are also eligible.
For basic skills training grants, basic or entry-level skills training
is
eligible according to the type and scope of business being conducted by
the
employer. For information technology training grants training must meet
recognized industry skill standards, including, but not limited to,
training
resulting in certification. For both programs the employer must verify
that
participating employees earn 150% of minimum wage, work full-time and
are
Pennsylvania residents. Grants provide up to $450 per eligible
employee/trainee
for the basic skills training grant, and up to $700 per eligible
employee/trainee for the information technology training grant.
Infrastructure
Development Program (IDP)
IDP can provide grants and loans for eligible
infrastructure improvements necessary for your project. Eligible uses
of funds include, but are not limited to, transportation facilities
such as access roads at the site; drainage systems; sewer systems;
acquisition of land, rights of way, and easements.
Industrial Sites
Reuse Program
This program, also known as Brownsfields Program,
provides grant and low interest loan financing to companies, private
real estate developers, and municipalities to perform environmental
site assessment and remediation work at former industrial sites. No
financing is available to companies or others who caused the
environment contamination on the property. 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.
Pennsylvania
Capital Access Program (PennCAP)
This program provides a loan guarantee through
participating banks for businesses seeking to obtain commercial
financing. The maximum limit for a loan guarantee is currently
$200,000; this is expected to increase to $500,000 in the near future.
No restriction is placed on the category of business that may apply for
the loan guarantee. The business applies for a loan directly with the
participating bank of its choice.
Pennsylvania
Economic Development Financing Authority (PEDFA)
Tax-exempt and taxable bonds, both in pooled
transactions and
stand-alone transactions, to be used to finance land, building,
equipment,
working capital, and refinancings. Eligible companies include those in
the
manufacturing, non-profit, energy, and transportation industries.
Small and medium sized projects, ranging from $400,000 to $7 million,
can be
grouped together into a single bond issuance in which high up-front
issuance
costs are shared, making the financing cost effective regardless of the
individual project size. All projects must be guaranteed by a
participating
bank, usually through a Letter of Credit. Composite projects must
follow the
timing schedule and financing structure of the PEDFA composite bond
pool. The
PEDFA pool is a 10-12 week process, from the announced application
deadline to
the bond closing. In general, there are three bond pools each year,
with bond
closings currently being held in April, August, and December. (This
schedule is
subject to change.) Medium and large sized projects, usually ranging
from $4
million and up, can be issued on an individual "stand-alone" basis. As
job creation is the goal of the program, one job must be created for
every
$50,000 financed.
Rates on Tax-Exempt Bonds are approximately 85% of prime interest rate.
Weekly
variable interest rate is tied to the market rate for tax-exempt bonds;
the term
is up to 30 years. Current rates are available upon request. PEDFA
charges a
one-time .2% fee to process an application. A processing fee is also
charged by
the local Industrial Development Corporation (IDC) or Industrial
Development
Authority (IDA) that submits an application to PEDFA on a company’s
behalf.
Pennsylvania
Minority Business Development Authority (PMBDA)
PMBDA offers low interest loan financing to businesses
which are owned and operated by minorities. Interest rate is one half
of prime but not less than 4%. Maximum loan amount is $500,000 or
$750,000, depending on whether the business is located in a targeted
area and the nature of the business. There are minimal restricts on the
type of businesses that may apply for loans. PMBDA also operates a loan
guarantee program similar to PennCAP but targeted toward the minority
business community.
Small Business
First
This new program, effective July 1, 1996, provides low
interest loan financing to small business (generally, 100 employees or
less) for land and building acquisition and construction, machinery and
equipment purchases and working capital. The program also provides
financing for small businesses that need to come into compliance with
environmental regulations or that are involved in municipal of
commercial recycling. The program also provides financing for small
businesses impacted by defense conversation. Maximum loan amount is
$200,000. Interest rate is 4%. Companies must agree to create or
preserve jobs as a condition of financing.
Union City Area Enterprise Zone
Tax Credit Program
Encourages private corporate investments in the Corry
Area Enterprise Zone that result in meeting community economic goals.
Available to corporations who: pay Pennsylvania Corporate Taxes; have a
plan developed in cooperation with and approved by the CIBA ( a
non-profit organization - Corry Industrial Benefit Association); submit
an application to the Pennsylvania Department of Community Affairs
Bureau of Human Resources prior to the initiation of construction or
rehabilitation; minimize the dislocation of current residents in the
facility or neighborhood; and, agree to project audit by a registered
or certified public accountant within 90 days of the project's
completion. This report must then be submitted to the authorizing
agency. Maximum credit: $250,000.
Job Training
Partnership Act (JTPA)
Administered by the Erie County Human Resources
Department, this program is available to individuals who meet specific
program criteria. Offers classroom training at employer's site or
vocational-technical school to qualified participants based on employer
personnel requirements, or on the job training reimbursed at a rate of
50% of starting salary. Length of training depends on the skill
requirements of the job.
Workforce
Investment Act (WIA)
Administered by the Northwest PA Workforce Investment
Board
through the county CareerLink offices, these programs offer individual
training,
OJT and customized training for employers and is available to
individuals and
businesses who meet program-specific criteria. Customized training or
On-The-Job
training provided at employer's site or vocational-technical school to
qualified
participants based on employer's workforce requirements. Classroom
training is
from program of employer's choice. Both reimbursed at a rate of 50% of
starting
(or current) salary. Length of training depends on the skill
requirements of the
job.
Pennsylvania
Infrastructure Investment Authority (PENNVEST)
Developed to assist communities needing clean drinking
water distribution and treatment facilities and/or safe sewage and
storm water conveyance and treatment facilities. Commonly provides
funding for design, engineering, and construction of public and
privately owned drinking water distribution and treatment facilities
and /or storm water conveyance and treatment systems. Will loan up to
$11 million for one municipality; up to $20 million for more than one
municipality. Up to $350,000 for design and engineering and up to 100%
of project cost. Interest rates range from 1% to 6% depending upon the
resulting user rates in the community; terms depend upon the useful
life of the asset being financed; disbursement based upon reimbursable
expenses.
Northwest
Pennsylvania Regional Planning and Development Commission
Services northwest Pennsylvania area with a wide array
of programs: ARC, and EDA Revolving Loan Fund Program, Small Business
First Revolving Loan Program, and FmHA Intermediary Relending Program.
Northwest
Pennsylvania Regional Industrial Resource Center
Offers technology development assistance throughout 13
counties in Northwestern Pennsylvania to small and mid-sized
manufacturers with 500 or fewer employees. Specializes in providing
value-added services to help manufacturers improve quality,
productivity, and adapt modern production technologies. Nature and
value of services vary depending on company.
Ben Franklin
Partnership (BFP)
Promotes technological innovation through
business/university partnerships. Offers a Challenge Grant Program for
advanced technology, research and development, and start-up companies.
Can be used for research and development, technology transfer, joint
research and development between private companies and universities, or
entrepreneurial assistance and training. Usually range from $5,000 to
$100,000 in grant form; often with royalty payback provision. Also
offers Seed Venture Capital Funds to early-stage venture companies for
product development and working capital. Amount is negotiable; equity
financing. Environmental Technology Fund assists companies developing
recycling processes or markets for recycled materials with research and
development and technology transfer. Up to $100,00 in grant form.
Enterprise
Development Fund of Erie County (EDFEC)
The Enterprise Development Fund of Erie County, Inc. is
a local
revolving loan fund established in 1987 by the Economic Development
Corporation
of Erie County. The Fund was established to provide a stable interest
rate and
credit enhancement through second-lien lending for small businesses in
Erie
County
Small businesses can receive a Fund loan for the acquisition of land
and
buildings, machinery and equipment, or working capital needs. Loans are
made for
projects which would not go forward but for the Fund loan. All eligible
projects
should have the goal of job creation as a result of Fund financing. One
new,
full-time job should be created within three years for each $25,000
loaned for
the project. Consideration will however be given to projects that
retain jobs.
Priority loan status is given to projects located at sites that were
developed
with federal and state investment, such as the Fairview Business Park,
Baldwin
Business Park, Bundy Industrial Park, Veshecco Industrial Park, East
12th Street
Industrial Park, Albion-Cranesville Industrial Park and the small
business
development incubators.
The Fund can provide financing up to 50% of the total project costs or
a maximum
of $150,000. The interest rate is fixed at 4% at the time of loan
closing. The
terms of the loan generally are as follows:
Used machinery and equipment 5 years
New machinery and equipment 7 years
Land and building 10 years
In construction or acquisition projects, a short term of interest only
payments
can be negotiated before the amortization begins. Generally, the loan
is a
second lien on business assets. It some cases, the Fund will be in
third
position when a private lender or state authority require superior
position
Pollution
Prevention Assistance Account (PPAA)
Assists Pennsylvania small business enterprises in implementing
pollution
prevention and energy-efficient projects, enabling these businesses to
adopt or
install equipment or processes that reduce pollution or energy use.
A for-profit business enterprise, excluding mercantile and service
related
enterprises, that has no more than 100 total employees and acquires or
installs
pollution or prevention or energy efficient equipment or processes is
eligible
to apply. Eligible types of businesses include: agricultural,
industrial
manufacturing (research and development), export service, hospitality,
defense
conversion-related, computer-related services, construction and child
care
enterprises.
Loans may be up to $100,000 or 75% of the total project cost, whichever
is less.
Borrower would finance the remaining 25% of the total eligible project
cost with
proceeds from a private lender or equity from the owners or investors.
Matching lending sources must have equivalent or longer terms.
Equipment may
be ordered, but not installed or operated prior to the State’s approval
of the
loan. Loans are offered at an annual fixed interest rate of 2%. The
term of the
loan can be up to 10 years or the life of the asset, whichever is less.
All
loans must be secured with a lien position on the asset being financed
and the
company guarantee. DCED may require personal guarantees of principals
as well.
