Center for Private Financing

The Center for Private Financing assists Pennsylvania businesses in accessing cost-effective financing by utilizing private sources of capital available through several different prograsms, including bond financing and loan guarantees.

Programs

Pennsylvania Economic Development Financing Authority (PEDFA) Bond Financing 

PEDFA administers both a tax exempt and a taxable bond program which can be used for land and building acquisition, building renovation and new construction, machinery and equipment acquisition and installation, designed infrastructure, refinancing and working capital. PEDFA's competitive interest rates and affordable closing costs make the financing cost effective for projects of all sizes. There are two types of bonds:

PEDFA Tax-Exempt (see PEDFA rates below)

Tax-Exempt bonds are bonds for which the interest earned by the bondholders is excluded from federal income tax. Since these bonds are more attractive to investors, the interest cost of Tax-Exempt bonds is restricted by federal law.
Please click here for more information.

PEDFA Taxable (see PEDFA rates below) 

Taxable bonds have a higher interest rate than Tax-Exempt bonds, but they are not subject to the same stringent tax requirements as Tax-Exempt bonds. All businesses qualified to do business in Pennsylvania except speculative activities may be eligible for taxable financing. There are also fewer restrictions on the uses of the funds.
Please click here for more information.

New American Development Fund (NADF)

Encouraging economic development and the creation of new jobs is one of the Commonwealth's highest prioritiies. Unfortunately, many worthy projects never get off the ground because they either cannot raise sufficient capital to fund their operations, or because their borrowing costs are high. The New American Development Fund seeks to mitigate this problem by providing enterprises with the opportunity to obtain low-cost private financing to successfully grow their businesses and create jobs for Commonwealth workers within the state's federally-designated EB-5 regional center.                                    Please click here for more information.                                                         

Second Stage Loan Program

The Second Stage Loan Program, which is administered by the Commonwealth Financing Authority (CFA), is a loan guarantee program that offers guarantees for bank loans to second state manufacturers, advanced technology, and life sciences businesses to support growth in these vital sectors. The loan guarantees are primarily for working capital, but also the asset financing needs of life sciences, advanced technology, or manufacturing businesses that have been in existence for at least two years, but no more than seven years at the time of application.
Please click here for more information.

First Industries Guarantee

The First Industries Tourism and Agriculture Loan Guarantee Program is a program that offers guarantees for bank loans to undertake projects related to agriculture and tourism within Pennsylvania. An eligible project for a loan guarantee may be a for-profit business enterprise (including a corporation, limited liability company, sole proprietor, cooperative or partnership) or a non-profit organization that is engaged in either agriculture-related or tourism-related activities, as defined in the program guidelines.
Please click here for more information.

Tax Increment Financing Guarantee

The Tax Increment Financing Guarantee Program is designed to promote and stimulate the general economic welfare of various regions and communities in the commonwealth of Pennsylvania and assist in the development, redevelopment, and revitalization brownfield and greenfield sites through the use of Tax Increment Financing (TIF) in accordance with the Tax Increment Financing Act of July 11, 1990 as amended, 53 P.S. 6930.1 et seq. (the "TIF Act").
Please click here for more information.

Pennsylvania Community Development (PCD) Bank

The purpose of the Pennsylvania Community Development Bank is to provide grant funding and liquidity financing for State Accredited Community Development Financial Institutions (CDFIs). These are local, non-governmental organizations that meet certain requirements under the Federal Community Development Banking and Financial Institutions Act of 1994.
Please click here for more information.

Business Opportunities Fund (BOF)

The Business Opportunity Fund is a partnership between the Pennsylvania Community Development Bank, the Community First Fund, Bridgeway Capital and the Pennsylvania Department of General Services. The purpose of this pilot program is to assist small minority or women-owned contractors ansd other small business owners who lack access to lines of credit or small business loans from traditional financial institutions, since this lack of access to credit prevents these businesses from competing for governmental and private sector contracts. These business owners often require technical assistance in governmental procurement including achieving necessary certification and bid preparation. The BOF is designed to assist borrowers with both financing and technical assistance.
Please click here for more information.   

Pennsylvania Capital Access Program (PennCAP)

The Pennsylvania Capital Access Program is a loan guarantee program, established in November 1994 by the Pennsylvania Economic Development Financing Authority. PennCAP is designed to help borrowers that don't quite meet the bank's normal small business lending requirements. Borrowers apply for PennCAP loans directly through participating banks. A borrower must have a branch of a participating bank in their local area in order to receive a PennCAP loan through that bank. All loan terms, conditions and use of proceeds are negotiated directly with the participating bank.
Please click here for more information. 

Next Generation Farmer Loan Program

The Next Generation Farmer Loan Program uses federal tax-exempt mortgage financing to reduce a farmer's interest rate for capital purchases, such as the purchase of farm land or agricultural machinery and equipment.
Please click here for more information.  

 

Additional Important Information

PEDFA Rates

The following chart is designed to help prospective borrowers determine what the effective or "all-in" rate would be for a PEDFA financing on any given day. The top figure is a rate based on an average of rates for a specified period. The four following figures are estimated annual charges, all of which are totaled to show what the effective rate would be (the final figure in bold). PLEASE NOTE: The weekly variable rates as of January 30, 2012 were as follows:  Tax-Exempt - 0.11% / Taxable - 0.20 %

 

TAX-EXEMPT   TAXABLE
0.11 % Variable Weekly Interest Rate 0.20 %
0.60 % Master Bank LC Fee 0.60 %
1.50 % Local Bank Fee * 1.50 %
0.13 % Remarketing Agent 0.13 %
0.11 % Trustee ** 0.11 %
2.45 % TOTAL 2.54 %

 

*   Estimated Rate – Fee is negotiated between the borrower and their local bank 

**  With a minimum fee of $1,750 and a maximum of $4,000 

 

PEDFA Standard Form Bond Documents

Please access the appropriate standardized form bond documents (the "Bond Documents") that are utilized in connection with the PEDFA Composite Bond Pool below.  Do not utilize Bond Documents from any earlier PEDFA pool, as we are always working to fine tune the Bond Documents and earlier versions may be somewhat different. We suggest that prospective Borrowers provide the Bond Documents to their counsel at their earliest convenience for his / her review. The Bond Documents not only set forth the terms and conditions of the financing, but they contain important representations, warranties, and covenants that the Borrower will make at the time of the project's closing.  

Please note that all Bond Documents, except the Reimbursement Agreement (for double-tier projects) and the Reimbursement, Credit, and Security Agreement (for single-tier projects) (collectively the "Reimbursement Agreement") are in final form. Bond Document negotiation for individual PEDFA pool projects is not feasible, as the success and cost-efficiency of a PEDFA pool depends on uniformity. A good example is the Standard Provisions for Trust Indentures (the "Standard Provisions"), one of the Bond Documents. The Standard Provisions are incorporated by reference in each project's Trust Indenture, and as such, cannot deviate among projects.  

Single Tier Documents

Double Tier Documents

501(c)(3) Documents

Master Loc Bank Documents

Underwriter Documents

Volume Cap Allocation

The Commonwealth of Pennsylvania, through the Department of Community and Economic Development and with the cooperation of the Governor's Office allocates its state ceiling of volume cap allocation among several catergories. The Department also has the ability, under the Job Enhancement Act, to issue statements of policy to further govern the distribution of allocation. The Department is responsible for informing local Industrial Development Authorities, Industrial Development Corporations, and other bond issuers of these policies and does so through the distribution of an Allocation Bulletin. Please reference this bulletin to find updates and changes in policy that may not be reflected in guidelines.