Subject: DCED Interest Rates
Governor Corbett remains committed to putting Pennsylvania back on the path to prosperity through the implementation of strategic policies and initiatives that improve the state’s business climate and encourage new growth. Toward this end, the administration has identified various fundamental factors that must be addressed to ensure continual economic growth, including the ability of our businesses to access much-needed capital.
In December 2012, the Corbett Administration reduced the interest rates of four DCED business loan programs to improve access to capital and encourage business expansion and attraction, and to spur new job creation. Interest rates for the Machinery and Equipment Loan Fund (MELF), the Small Business First (SBF) Program, the Pollution Prevention Assistance Program and the Export Financing Program were reduced from 2.75 percent to 1.50 percent. DCED also waived its standard fees charged to borrowers.
DCED’s lower interest rates were initially available for program applications received through March 31. However, the immediate and positive impacts realized from Governor Corbett’s initiative, led to the extension of the interest rate reduction for an additional three months through June 30.
Since the initial announcement of the interest rate reduction, 42 SBF loan applications and 32 MELF applications have been submitted to DCED for consideration. These 76 independent project proposals forecast the potential creation of more than 1,500 jobs and the retention of more than 8,600 more jobs. In 2011, prior to the interest rate reduction, DCED received a total of 34 SBF applications and only six MELF applications the entire year. The additional loan programs included in the lowered interest rate also had an uptick in applications.
As June 30 approaches, I wanted to make you aware that DCED will not be further extending the interest rate reductions. The reduced rate will apply to applications received through June 30, there will be no exceptions.
With only a short window of opportunity remaining, I encourage Pennsylvania businesses to take advantage of the reduced interest rates, and submit any outstanding applications prior to the cutoff date. For any questions, please call the Department of Community and Economic Development Customer Service line at 1.866.466.3972
C. Alan Walker
Department of Community and Economic Development