Pennsylvania Industrial Development Authority Drops Rate to 2 Percent on Fixed Term for Business Loans
Harrisburg, PA – Qualified businesses that want to make new investments in equipment, facilities or real estate now can apply for loans at a low 2 percent fixed rate through the Pennsylvania Industrial Development Authority (PIDA).
“PIDA is offering this reduced interest rate for a limited time to encourage businesses to make investments and grow jobs in the commonwealth,” said Department of Community and Economic Development Secretary Dennis Davin. “This below-market rate is a significant decrease from the previously offered 4 percent rate and will enable Pennsylvania companies to realize significant cash-flow savings.”
PIDA loan rates are normally set using a traditional spread above the 10-year U.S. treasury rate and readjusted quarterly, and typically vary depending on the purpose of the loan. The new 2 percent rate is below the market rate and will use a flat rate for all loans.
A wide variety of business use low-interest PIDA loans to sharpen their competitive edge. Those businesses include:
- Manufacturing enterprises;
- Industrial enterprises;
- Agricultural processors and producers;
- Research and development enterprises;
- Hospitality enterprises;
- Computer-related service enterprises;
- Construction enterprises;
- Child day care enterprises;
- Retail and service enterprises; and
The maximum loan amount under PIDA is contingent upon the business type, project cost, and number of jobs being created and/or retained as a result of the project. Eligible costs that can be financed through PIDA include acquisition of land, buildings, machinery, and equipment, as well as construction, renovation, and working capital costs. PIDA is generally able to finance up to 50 percent of eligible project costs, with matching funds from traditional lenders such as banks, equity, or other state financing/economic development-based programs.
Established in 1956, PIDA is a component unit of the Department of Community and Economic Development (DCED) and provides low-interest loans and lines of credit through certified economic development organizations, known as CEDOs, for eligible businesses that commit to creating and/or retaining jobs. It also provides these loans for the development of industrial parks and multi-tenant facilities.
For more information about the PIDA or DCED, visit dced.pa.govor follow us on Twitter.
Michael Gerber, DCED, 717-783-1132