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DCED Loan Programs Presentation


Department of Community & Economic Development

                     Presented By:
                     Jackie Minor
              Economic Development Analyst

                       June 1, 2005

                                  Center for Business Financing, Loans Division
                                             Commonwealth Keystone Building
                                                      400 North Street, 4th Floor
                                                          Harrisburg, PA 17120
                                   Phone: (717) 787-6245 Fax: (717) 772-2890
Community Economic Development Loan Program

    • The Community Economic Development Loan
      Program (CED) provides assistance to startup
      and fledgling businesses to be successful in
      providing products or services to communities
      previously unserved or underserved.
Community Economic Development Loan Program

   • Eligible Businesses                  • Loan Limits
     For-profit business with 100 or        Maximum loan amount is
     less full-time employees.              $100,000 or 50% of project
                                            cost (whichever is less).
     Mercantile - Commercial –
                                          • Job Requirements
     Business must demonstrate a            Retain jobs in existence as of
     positive, direct community             the date of the loan
     impact.                                application.

   • Eligible Use of Funds                • Applying for a CED Loan:
     Land and building, machinery           Submit LOI to DCED. If
     and equipment and working              accepted, the applicant will be
     capital.                               invited to submit a Single
                                            Application for Assistance and
   • Ineligible Use of Funds                will be referred to their local
     Refinancing                            ALO or CDFI for assistance.
     Related party transactions
                                          • Questions: Contact the
                                            Center for Business Financing
   • Interest Rate                          at (717) 783-5046
     2% fixed
       Small Business First Program

• The Small Business First (SBF) loan program is
  designed to stimulate the expansion and assist in
  the retention of small businesses for the purpose
  of creating new jobs and retaining existing jobs in

• SBF provides low-interest loan financing for a
  portion of the costs of land, building, machinery
  and equipment, and working capital to businesses
  unable to fully finance these projects with equity,
  bank financing, or other private and public
            Small Business First Program

• Eligible Businesses                   • Collateral
  Agri-business and Production            Loans must be secured at the
  Agriculture– Industrial –               highest lien position available on
  Manufacturing –Hospitality and          one or more assets.
  Defense Conversion –Construction –      SBF may require personal
  Recycling – Computer Services – For     guarantees of principals.
  profit or Nonprofit Day Care
  Centers.                              • Limitations
                                          Business must have 100 employees
• Eligible Use of Funds                   or less.
  Land – Buildings – Machinery –          Maximum Loan amount, $200,000
  Equipment - Working Capital.            or 50% of project cost, whichever is
                                          less (working capital loans,
• Ineligible Use of Funds                 $100,000 or 50% of project cost,
  Refinancing existing debt – Costs       whichever is less).
  incurred prior to approval of SBF       Project must create/retain at least
  loan – Brokers – Consultant fees.       one job for every $25,000 borrowed
                                          (does not apply to farmers).
• Terms
  Real Estate – 15 years; M & E – 10    • Applying for a SBF Loan
  years;                                  Single Application for Assistance
  Working Capital – 3 years               submitted through area loan
• Interest Rates
  3.25%                                 • Questions: Contact CBF at (717)
         Export Finance Program

• Export Finance Program (EFP) is an activity
  undertaken by a Small Business Enterprise related
  to the export of goods and services outside of the
  United States. The term includes manufacturing,
  assembling and like operations.

• The EFP increases the level of exports and
  number of exporting companies in Pennsylvania.
  Financing can be used for working capital or
  accounts receivable financing.
                Export Finance Program

• Eligible Applicants                        • Loan Amount/Rate
 Businesses that need financing for            Maximum amount $350,000 – Rate
 specific or multiple export transactions      3.75%
 that have 250 employees or less.
                                             • Terms
 Must be in operation but not necessarily      Working Capital – 12 months;
 exporting for a least 12 months.
                                               Accounts Receivable – Repayment is
                                               due when the receivable is paid or 180
• Eligible Uses of Funds                       days after disbursement, whichever is
                                               sooner. Lines of credit for multiple
 Working Capital – Acquire Inventory –         transactions are available for 12 month
 pay for direct or indirect costs used for     period.
 the manufacture or purchase of goods, or      Condition – All loans will have either an
 for the provisions of services. – Support     Export Import Bank guarantee or credit
 Standby Letters of Credit used as bid         insurance.
 bonds, performance bonds or payment
 guarantees.                                 • Applying for EFP
                                                     Contact either the SBF office
 Accounts Receivable – Finance accounts                    (717) 783-5046
 receivable up to 180 days from the date                           -or-
 of arrival at the port of importation.
                                               Team PA Export Network Region
                                               Provider (888) 723-9678
Pollution Prevention Assistance Account

• 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.
  Pollution Prevention Assistance Account

• Eligible Businesses                     • Rate and Terms
  A for-profit corporation, LLC,            Annual fixed rate of 2%. – Term of
  partnership, proprietorship or other
  business entity that has no more          loan can be up to 10 years or the
  than 100 total employees and              life of the asset (whichever is less).
  operates from a stationary source.
                                          • Loan Amount
• Eligible Uses of Funds                    $100,000 or 75% of TPC (whichever
  Adopt or install pollution prevention     is less)
  or energy efficient equipment or
  processes directly related to the         Matching lending sources must have
  business activity of the small            equivalent of longer terms.
  business enterprise.
                                          • Applying for a PPAP Loan:
• Ineligible Use of Funds
                                          1.Complete Single Application for
  Refinancing existing debt – less than
  arms length transactions –                Assistance (DCED)
  Equipment that focuses on recycling     2.Complete Determination of Eligibility
  or pollution control rather than          Application. (DEP)
  prevention, i.e. scrubbers, dust
  collectors; Projects that have
  commenced prior to DCED approval.       • Questions: Contact SBF at (717)
Underground Storage Tank Upgrade Loan Program

     • Assists the owners of regulated underground
       storage tanks to upgrade or remove their
       underground storage tank systems to meet
       federal Environmental Protection Agency (EPA)
       upgrade requirements.

     • The program is funded by the Pennsylvania
       Insurance Department and is administered by
       the Department of Community and Economic
       Development (DCED).
Underground Storage Tank Upgrade Loan Program

                                           • Loan Limits
   • Eligible Applicants
     Owners of regulated underground         Loan term of 10 years.
     storage tanks required to meet          Maximum loan amount $500,000 or
     federal EPA upgrade requirements.       75% of project cost, whichever is
   • Eligible Uses of Funds
     Tank removal and closure; tank          10% of the project cost must be
     replacement; upgrade of existing        cash equity.
     tanks; associated engineering,
     design and permitting costs;
     installation costs.                   • Applying for a USTULP Loan:
                                             Single Application for Assistance is
   • Interest Rate                           submitted to the department of
     Interest rate of 5-year US Treasury     Insurance, Underground Storage
     note at time loan is approved.
                                             Tank Indemnification Fund.

                                           • Questions: Contact Insurance at

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