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Pennsylvania Industrial Development Authority (PIDA)

PIDA Interest Rates - Fourth Quarter 2018
 
The Pennsylvania Industrial Development Authority (PIDA) recently updated its interest rates for the quarter beginning October 1st, 2018. As the Certified Economic Development Organization (CEDO) for Montgomery County, MCDC can work with prospective applicants and their financial institutions to prepare and submit applications for PIDA funding. Terms and rates vary depending on the type of business, the project, and the use of funds.
The PIDA-MELF Fund (Machinery & Equipment Loan Fund), the lending limit for equipment loans has been reduced from $5,000,0000 to $400,000.  This applies to newly submitted loan applications moving forward. 
The current guidelines for the PIDA program can be found HERE
Listed below are the updated interest rate options for the PIDA loan program.  These rates are in effect for loan applications received through December 31, 2018. 
 
For Real estate loans financing eligible land and building costs, borrowers will have the following interest rate options:
 
For term loans with a regular amortization;
  1. Fixed interest rate for the full term of the loan (up to a 15-yr. period), set at the current 10-year treasury yield + 100 basis points.  Based on the current 10-year treasury yield, the fixed rate option is 4.00% for the life of the loan.
  2. Fixed interest rate for a seven (7) year period set at the 10-year treasury yield.  After seven years, the rate will reset to the then-current 10-year treasury yield.  Please note, the reset rate is limited to a 200 basis point increase/decrease.  The reset rate is then fixed for the duration of the loan.  Based on the current 10-year treasury yield, the rate for the initial (7) year period is 3.00%.

For 10-year term loans with a 20-year amortization period;

  1. Fixed interest rate for the full term of the loan (10-yr. period). This option is calculated using the 10-year treasury yield +100 basis points.  Based on the current 10-year treasury yield, the fixed rate option is 4.00% for the life of the loan.
  2. Fixed interest rate for a five (5) year period set at the 10-year treasury yield.  After five years, the rate will reset to the then-current 10-year treasury yield.  Please note, the reset rate is limited to a 200 basis point increase/decrease.  The reset rate is then fixed for the duration of the loan.  Based on the current 10-year treasury yield, the rate for the initial (5) year period is 3.00%.
For Equipment loans - 4.00% fixed rate for the full term of the loan.
For Working capital and accounts receivable lines of credit - 4.00% fixed rate for 12 month period.
For Pollution prevention and energy efficiency loans - 2.00% fixed rate for the full term of the loan.