Pennsylvania Business Loan Programs Drop Interest Rates
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UPDATED: Feb 9, 2021
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The Pennsylvania Department of Community and Economic Development (DCED) has declared that it will drop interest rates for five commercial loan programs as part of an effort to stimulate job growth.
“Governor Tom Corbett’s pro-growth policies are leading to resurgence in manufacturing in Pennsylvania. This new initiative makes a bold statement that Pennsylvania is committed to growing our businesses, promoting job creation, and improving the economic base of our communities,” said DCED Secretary C. Alan Walker in a press release from the DCED.
The DCED lowered the rates on business loans from the Machinery and Equipment Loan Fund, the Small Business First Program, the Pollution Prevention Assistance Program, the Export Financing Program and the Pennsylvania Industrial Development Authority. Originally, rates stood at 2.75 percent, but the new rate level has fallen to 1.50 percent.
These changes are the result of recommendations from the Governor’s Manufacturing Advisory Council (GMAC). GMAC discovered that 78 percent of small business manufacturers were negatively impacted by a lack of access to commercial loans.
“Access to capital is a critical component of any successful manufacturer. By reducing interest rates and the cost of borrowing, we are encouraging new growth through providing critical access to capital and freeing up operating cash to support new job creation,” said Walker in the press release.
Steve Kratz, Press Secretary for the Department of Community and Economic Development, told loans.org that while the existing programs emphasize manufacturing, they are open to all businesses.
“Manufacturing is a growing industry in Pennsylvania. In 2011, 12,100 new jobs were created. This is the second year in a row of manufacturing job increases,” said Kratz.
Kratz continued to explain that he expects demand to be high in the wake of these rate drops.
“This gives them an incentive because it is such a low interest rate. The loans are capped for each program, so a lot of the large projects will require private financing,” said Kratz.
Kratz explained that private financing is often granted to businesses that have received the “stamp of approval” of state commercial loan financing.
These new lowered interest rates on commercial loans will be available for all applications that are submitted through March 31, 2013.