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Inward Investment Guides

Pennsylvania Direct Financial Incentives 2012

Pennsylvania's economic development, finance and tax organizations provide a range of incentive programs to initiate new business and commercial investment. Specific programs include Building PA, the New Pennsylvania Venture Guarantee Program, and Keystone Opportunity Zones.

Area Development Online Research Desk (2012)
(page 3 of 3)
PA Technical Assistance Program (PennTAP)
One application for one designated entity for program implementation of technical assistance to manufacturing business owners.
Contact Office
Technology Investment Office

Pennsylvania Community Development Bank Loan Program (PCD Bank)
Debt financing for Community Development Financial Institutions (CDFIs) Public funds (25%) matched with private sector funds (75%) to create a loan pool for eligible
CDFIs.
State accredited community development financial institution
CDFI must meet state accreditation standards and program underwriting guidelines
Minimum two years lending experience
Focus on economic development and job creation
Uses of Funds or Service
Economic development loans that support job creation
Community development loans that support job creation
Contact Office
Center for Community Financing - or Private Capital Financing
Amounts (If Financing)
Loans from $250,000 to $5 million
Misc.Info
Financing Terms/Conditions
Principal and interest repaid quarterly
Interest rate is a blend between public rate of 50 basis points and private rate of U.S. Treasury rate plus 100 basis points
Collateral required
Monitoring covenants established for each borrower

Pennsylvania Economic Development Financing Authority (PEDFA)
Tax Exempt Bond Program
Manufacturing
Nonprofit 501(c) (3)
Energy
Solid Waste disposal
Wastewater treatment
Transportation facilities
Assisted living/housing
Uses of Funds or Service
Land and building acquisition
Building renovation and new construction
Machinery and equipment acquisition and installation
Designated infrastructure
Tax-exempt bond refinancing
Contact Office
Center for Private Financing
Amounts (If Financing)
Loans no less than $400,000 and no more than $10 million for manufacturers
No upper limit for other projects
Up to 100% of project costs
Misc.Info
Financing Terms/Conditions
Since 1989, rates have averaged 46% 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
$500 fee due at time of application, to be credited against the issuance fee when project closes

Pennsylvania Economic Development Financing Authority (PEDFA) Taxable Bond Program

All types of businesses needing access to low-cost capital
Uses of Funds or Service
Land and building acquisition
Building renovation and new construction
Machinery and equipment acquisition and installation
Designated infrastructure
Refinancing
Working capital
Contact Office
Center for Private Financing
Amounts (If Financing)
Loans no less than $400,000
Up to 100% of project costs
Misc.Info
Financing Terms/Conditions
Since 1990, rates have averaged 61% of prime interest rate
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
$500 fee due at time of application to be credited against the issuance fee when project closes

Pennsylvania Industrial Development Authority (PIDA)

Manufacturing
Industrial
Agricultural processors
Firms establishing a national or regional headquarters
Computer/clerical operation centers
Uses of Funds or Service
Land and building acquisition
Building construction and renovation
Multi-tenant spec building construction, acquisition and renovation
Contact Office
Center for Business Financing, Loans Division
Amounts (If Financing)
Loans up to $2 million (within Enterprise Zones, Act 47 Industrial Communities, Brownfield Sites, and Keystone Opportunity Zones, $2.25 million)
No more than 30% to 70% of total eligible project costs, depending upon firm size and unemployment rate
Brownfield sites and those in an Act 47 municipality, Enterprise Zone, Keystone Opportunity Zone or Advanced Technology projects qualify for the lowest 2.75% interest race (currently 3.25%).
Misc.Info
Financing Terms/Conditions
3.25% or 4.25% interest rate, depending upon local unemployment rate (Rates subject to change; contact PIDA for current rates)
Up to 15-year term on land and buildings
No less than a second mortgage on financed assets
Disbursement to applicant based upon reimbursable expenses
$35,000 cost per job created or retained (no cost per job requirement on industrial park or multi-tenant projects.)

Pennsylvania Minority Business Development Authority (PMBDA)
Businesses owned and operated by ethnic minorities
Uses of Funds or Service
Land and building acquisition
Building, construction and renovation
Machinery and equipment acquisition and installation
Working capital
Contact Office
Center for Business Financing, Loans I Division
Amounts (If Financing)
Manufacturing, industries, high-tech, international trade or franchise companies:
Loans up to $500,000 (within Enterprise Zone, $750,000) or 75% of total eligible project costs, whichever is less
Retail or commercial firms:
Loans up to $250,000 (within Enterprise Zone, $350,000) or 75% of total eligible project costs, whichever is less
Misc.Info
Financing Terms/Conditions
50% of prime interest rate, but no less than 4% Up to 15-year term for land and buildings
Up to 10-year term for machinery and equipment
Up to 3-year term for working capital
25% private-sector match required
25% private-sector match required
25% private-sector match required
Disbursement at closing
$15,000 cost per job created

Pennsylvania Pollution Prevention Assistance Program (PPAA)
Small businesses (100 employees or less) that operate from a stationary source and adopt or install pollution prevention or energy efficient equipment or processes
Uses of Funds or Service
Machinery and equipment acquisition and installation
Contact Office
Center for Business Financing, Loans II Division
Amounts (If Financing)
Loans up to $100,000 or 75% of total eligible project cost, whichever is less
Misc.Info
Financing Terms/Conditions
2% interest rate
Up to 10-year term

Regional Investment Marketing (RIM)
Grants to Regional economic development entities to promote trade and export for Pennsylvania businesses
Uses of Funds or Service
Grants for export/trade marketing efforts - must utilize IBM Global Competitiveness Tool
Contact Office
OIBD
Amounts (If Financing)
Varies
Misc.Info
Financing Terms/Conditions
Amy Zecha can also provide assistance

Renewable Energy Program Geothermal and Wind Projects
Grant and loan funds to eligible entities for geothermal and wind energy technologies
Uses of Funds or Service
To promote alternative energies
Contact Office
Center for Business Financing, Site Development Division
Amounts (If Financing)
Grant and Loans - details in guidelines
Misc.Info
Financing Terms/Conditions
Guidelines available at www.newpa.com

Second Stage Loan Program
Loan Guarantees for working capital for 2-8 yr old manufacturing, biotech, and technology-oriented companies
Pennsylvania banks
Uses of Funds or Service
Preference will be given to guarantees for working capital.
Land, building, machinery and equipment also eligible.
Contact Office
Center for Private Financing
Amounts (If Financing)
To be determined
Misc.Info
Financing Terms/Conditions
Program Guidelines to be approved and issued by Commonwealth Finance Authority. Visit www.newpa.com to confirm issuance and see details.

Section 108 Loan Program
Loan Guarantees as security for federal loans
Uses of Funds or Service
Acquisition, rehabilitation, relocation, clearance, site preparation, special economic development activities, certain public facilities and housing construction
Contact Office
Center for Community Financing
Amounts (If Financing)
Varies
Misc.Info
Financing Terms/Conditions
Refer to program guidelines

Small Business First (SBF)
Small business (100 employees or less) which are:
Manufacturing
Industrial
Mining enterprises
Hotels, motels, or restaurants
Municipal or commercial recyclers
Uses of Funds or Service
Land and building acquisition and construction
Machinery and equipment purchase and upgrades
Working capital
Contact Office
Center for Business Financing, Loans II Division
Amounts (If Financing)
Loans up to $200,000 or 50% of total eligible project costs, whichever is less
Maximum loan amount for working capital is $100,000 or 50% of total eligible project costs, whichever is less
Misc.Info
Financing Terms/Conditions
2.75% interest rate
$25,000 cost per job retained or created
Up to 15 year term, for land and building
Up to 10 year term for machinery and equipment
Up to 3-year term for working capital

Solar Energy Program
The Solar Energy Program provides financial assistance in the form of grants and loan funds to promote the use of alternative energy in the Commonwealth.
Uses of Funds or Service
Purchase and installation of solar systems
Purchase and installation of equipment used to manufacture solar energy components
Purchase and installation of equipment related to research and development associated with solar energy systems
Contact Office
Grants Division
Amounts (If Financing)
Maximum loan request for generation project: $5 million or $2.25/watt, whichever is less
Maximum grant request for generation project: $1 million or $2.25/watt, whichever is less
Maximum loan request for manufacturing projects: $35,000 for every job projected to be created within three years of approval of loan
Maximum grant request for manufacturing projects: $5,000 for every job projected to be created within three years of approval of grant
Maximum loan request for research and development projects: $5,000,000
Maximum grant request for research and development projects: $1,000,000
10 year amortization
Misc.Info
Financing Terms/Conditions
5% fixed rate currently, subject to change (most current rate is posted on newpa.com)
Program administered through CFA

Tax Increment Financing (TIF) Guarantee Program
Promotes and stimulates the general economic welfare of various regions and communities in the Commonwealth and assists in the development, redevelopment and revitalization of Brownfield and Greenfield sites in accordance with the TIF Act. The program provides credit enhancement for TIF projects to improve market access and lower capital costs through the use of guarantees to issuers of bonds or other indebtedness.
All municipalities and their authorities, including boroughs, townships, towns, counties and home rules that issue TIF bonds to fund local economic development projects.
Uses of Funds or Service
Infrastructure and environmental projects for industrial enterprises and retail establishments
Infrastructure, environmental and building projects for manufacturers, hospitals, convention centers and associated hotels
Utilization of abandoned or underutilized industrial, commercial, military, previously mined institutional sites or buildings; or undeveloped sites planned and zoned for development in accordance with any existing comprehensive municipal plan.
Contact Office
Center for Private Financing
Amounts (If Financing)
Maximum guarantee amount per project is $5 million
Misc.Info
Financing Terms/Conditions
Project must be located in a blighted area (containing the characteristics of blight as described in the Urban Redevelopment Law).
Project must be located within a TIF district
Project must be located on previously utilized property or on undeveloped property that is planned and zoned for development
Project must demonstrate its ability to comply with the TIF law prior to the issuance of bonds or other indebtedness.
Applicants must show that the revenue to be realized as a result of the project will be sufficient to offset the amount of the debt service
Business or private developers must agree to create a certain number of permanent full-time jobs within the TIF district.


Water Supply and Wastewater Infrastructure Program (PennWorks)
Municipalities
Industrial Development Corporations
Municipal Authorities
Investor-owned water or wastewater enterprise
Uses of Funds or Service
For water and sewer projects not used solely for residential purposes:
Land and building acquisition
Demolition
Water/sewer project
construction costs
Engineering and other fees associated with project.
Contact Office
Center for Business Financing, Site Development Division
Amounts (If Financing)
Grants and Loans:
Grants: $5 million maximum or 75% of the total eligible project costs, which ever is less.
Loans: $5 million maximum per project. 2% interest rate; may have repayment term of up to 20 years.
Additional limitations apply. Refer to guidelines.
Misc.Info
Financing Terms/Conditions
The project must serve a site or sites being prepared for economic development activities which involve the investment of capital in Pennsylvania enterprises and communities or which results in the creation of new or the preservation of existing jobs.
Please refer to Guidelines for additional details.
NO NEW FUNDING FOR THIS PROGRAM YEAR

Weatherization Program (WXX) aka LIHEAP
A federal program that works to minimize the adverse effects of high energy costs on low-income, elderly and handicapped citizens through client education activities and by providing weatherization services
Fixed network of local governments
Non-profit organizations
Uses of Funds or Service
Services include
Heating system modifications
Employing measures to reduce air leakage
Installing attic insulation
Replacing heating systems
Contact Office
Center for Community Empowerment
Amounts (If Financing)
Annual allocations to local governments determined by formula
Misc.Info
Financing Terms/Conditions
Refer to program guidelines Pennsylvania State Contact:
Governor's Action Team
Commonwealth of Pennsylvania
400 North Street
Commonwealth Keystone Building
Harrisburg, PA 17120
(717) 787-8199
Fax: 717-772-5419

Incentive and tax information is provided to Area Development by each state's economic development or commerce agency for information purposes only and is subject to revision at any time by the state government. Please contact the state agency directly for full requirements and offerings.
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