To encourage business growth and job creation, the Pennsylvania Department of Community and Economic Development (DCED) has lowered the interest rates on four of its loan programs from 2.75 percent to 1.5 percent and has waived fees charged by DCED to the borrowers.
DCED Secretary C. Alan Walker announced that the department is lowering interest rates for the Machinery and Equipment Loan Fund (MELF), the Small Business First Program (SBF), the Pollution Prevention Assistance Program (PPAA), and the Export Financing Program (EFP). Additionally, the department will also waive fees charged by DCED to the borrowers.
By reducing interest rates and the cost of borrowing, DCED is encouraging new capital investment, providing critical access to capital, and freeing up operating cash to support new job creation.
“Providing capital through low-interest loans to assist Lehigh Valley companies is absolutely critical to facilitating economic development and job growth,” said Don Cunningham, president and CEO of the Lehigh Valley Economic Development Corp., which assists businesses in obtaining such loans. “This decision by DCED is a very positive move to make it even more affordable for quality businesses to expand and grow their operations.”
The move comes at a time that LVEDC is improving and expanding its finance division to make capital available to businesses looking to expand or locate in the Lehigh Valley.
“We will be adding a finance person to our staff next year to help make companies aware of the financing programs available to them and to help them find the right access to capital,” Cunningham said.
The Machinery and Equipment Loan Fund provides low-interest loans to acquire and install new or used machinery and equipment or to upgrade existing devices. Loans are available up to $5 million or 50 percent of the total eligible project cost for a term of up to 10 years.
The Small Business First loan program provides low-interest loans for land and building acquisition, construction and renovation, machinery and equipment purchases, and working capital to assist certain businesses with fewer than 100 full-time employees. This program can finance up to 50 percent of a total project cost to a maximum of $200,000 for a term of up to 15 years.
The Pollution Prevention Assistance Program provides assistance for small businesses to implement pollution prevention and energy-efficiency projects, enabling these businesses to adopt or install equipment or procedures to reduce pollution, energy usage or raw materials. It funds up to 75 percent of the total project cost or $100,000 for a term of up to 10 years.
The new rates will initially be in place for applications received through March 31, 2013. More information on loan applications can be obtained from John Kingsley, LVEDC vice president of finance, at (610) 266-0887 or email@example.com.