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Industrial Financing

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PURPOSE
PEDFA finances business projects by issuing bonds and lending the proceeds to eligible businesses. PEDFA provides pooled bond issues and stand alone issues for both tax-exempt and taxable bonds. PEDFA works with the network of local industrial development authorities to market, package, and manage its financing. Pooled issues provide advantages in that smaller projects are “pooled together” to provide access to lower cost financing to companies which otherwise could not.

ELIGIBLE USES
Eligible uses of PEDFA taxable and tax-exempt financing include the acquisition, site preparation, and testing of land; the acquisition, construction, rehabilitation, engineering, or architecture of buildings; and the acquisition, delivery, and installation of machinery and equipment. In addition, conventional bond financing can be used for working capital, including inventory, supplies, labor, and taxes as well as refinancing.

LOAN PARAMETERS
The minimum amount of all loans is $400,000. The maximum loan amount for tax-exempt loans for manufacturing projects is $10 million. There is no maximum loan size for exempt facilities and nonprofit sponsored projects, nor is there a maximum loan amount for taxable bond financing. The term of the loan is a combination of the terms of the financed assets. For both conventional and tax-exempt bonds, real estate is financed for up to 30 years. Equipment is financed for up to 120 percent of its depreciable life for tax-exempt financing and for up to 15 years for conventional financing. Longer terms for conventional equipment financing are approved on a case-by-case basis.

LOAN CONDITIONS
The following conditions apply to PEDFA financing: All taxable bond projects should create and/or preserve ten jobs. All tax exempt bond projects should create and/or retain one job for every $50,000 borrowed. Company must procure a Letter of Credit equal to the amount of bond financing.

ELIGIBLE APPLICANTS
Businesses in the following categories are eligible for tax-exempt PEDFA financing: Manufacturing — For-profit firms that give new shapes, qualities, or combinations to materials through labor are eligible.

Exempt Facilities — The federal law specifically provides for the financing of certain non-manufacturing facilities with tax-exempt bonds, including transportation facilities, solid waste disposal facilities, and mass sewage facilities.

Nonprofit Entities — All firms, except for certain residential units, are eligible for conventional financing.

All types of businesses needing access to low-cost capital are eligible for taxable PEDFA financing.

FOR MORE INFORMATION

Bond Financing

PURPOSE
Benefits manufacturing companies by providing low cost capital for land, acquisition, construction, and renovation of facilities and equipment. The Schuylkill County Industrial Development Authority was created to provide a vehicle for securing tax exempt financing through private sector sources. Lenders benefit from interest rate exemption from certain state and federal taxes; borrowers benefit because of the lenders ability to lend at a lower interest rate than conventional interest rates. Loan proceeds can only be used for manufacturing projects and can cover building acquisition, new construction and renovation costs, as well as machinery and equipment. Rates and terms are subject to market conditions and I.R.S. regulations. Security for the loan is negotiated directly between the company and the lender or underwriter. A $10 million single project limit and a $40 million aggregate limit apply. Due to recent changes in Federal tax regulations, financing under this program should be discussed with both legal and tax advisors prior to application submission. The normal application processing time is about 45 days.

FOR MORE INFORMATION
Our colleagues at the Chester County Industrial Development Authority have compiled information about tax exempt financing in greater detail here link-external.

PURPOSE
Provide low-interest loans and grants for environmental assessments and remediation of former industrial land.

ELIGIBLE USES
Phase I, II, III, environmental assessments and remediation of hazardous substances. Eligible Applicants Public and private economic development entities, private companies and real estate developers. Loan Parameters Grants and loans up to the lesser of 75% of the project cost or $250,000 for environmental assessments and $1 million for remediation.

LOAN CONDITIONS
Interest rates of 2% with terms of up to five years for assessments and 15 years for remediation projects. A 25% match is required for grant and loan projects.

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link-external Industrial Site Reuse Program

Provides a $1,000 tax credit/job to approved businesses that agree to create or preserve new jobs in the Commonwealth within three years. A business must agree to create at least 25 new jobs or new jobs equaling at least 20% of the existing work force. Twenty-five per cent of the tax credits allocated each year must go to businesses with fewer than 26 employees. The tax credits may not be utilized by a business until the jobs are actually created. Funding is competitive and is offered through the Governor’s Action Team.

FOR MORE INFORMATION

link-external Job Creation Tax Credits

You Hire – You Train – We Pay

On-the-Job Training (OJT) offers employers an inexpensive way to train new employees. Sponsored by the Luzerne/Schuylkill Workforce Investment Board, and administered by PA CareerLink staff, the OJT Program is a federal program that is simple to use and offers qualified employers the opportunity to receive a 50% wage reimbursement on Workforce Investment Act (WIA) eligible hires.

Because training can be costly, OJT reduces that cost by paying your company 50% of a new trainee’s wages for up to 6 months or a maximum $5,000. The amount of reimbursable wages depends on the training needed by the new hire. PA CareerLink staff screen potential hires for program eligibility, work with you on developing a mutually agreed-upon training contract, handle most of the paperwork, and initiate a reimbursement schedule for monthly payments made directly to your company. A signed OJT contract must be in place by the trainee’s first day of work. Anytime your company is hiring full-time, regularly scheduled positions – at least 30 hours per week and at least $10 per hour – OJT can be considered.

To assist employers in finding qualified workers who have the basic skills necessary to learn on-the-job, the PA CareerLink provides WorkKeys National Career Readiness Certificate testing. WorkKeys is a job skills assessment system that helps employers select, hire, train, and retain a high-performance workforce.

FOR MORE INFORMATION
For more information about OJT, WorkKeys, and other PA CareerLink business services, please contact Frank Nieddu at 570-622-5253 ext. 140 or via email at fnieddu@redcogrp.com.

The Machinery and Equipment Loan Fund offers low-interest financing for industrial entities. The funds may be used for the acquisition and installation of new or used machinery and equipment or to upgrade existing machinery and equipment.

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MELF Incentive

PURPOSE
Provides grant funds to companies or on behalf of companies that will create or preserve jobs within the Commonwealth. The program is intended to deal with significant projects that offer substantial economic impact either for the Commonwealth as a whole or for the locality or region in which the company will locate. Opportunity Grant funds may be used to finance job training, infrastructure, land and building improvements, machinery and equipment, working capital and environmental assessment and remediation. This program is marketed exclusively through the Governor’s Action Team. Requires creation or preservation of 100 full-time jobs located in communities or counties suffering from severe economic distress; or provide a substantial number of new employment opportunities within a high-growth industry.

FOR MORE INFORMATION

Opportunity Grants

SEDCO — Schuylkill
Economic Development
Corporation

Union Station
One Progress Circle — Suite 200
Pottsville PA 17901-3070
Voice: 570-622-1943
Fax: 570-622-2903

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Copyright 2020 Schuylkill Economic Development Corporation

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