Introduction
The North Central Pennsylvania Regional Planning & Development Commission was awarded $1.76 million in July 2020 from the U.S. Department of Commerce Economic Development Administration (EDA) through the Coronavirus Aid Relief and Economic Security (CARES) Act to establish a new Revolving Loan Fund (RLF) that prevents, prepares for and responds to the Coronavirus pandemic or economic injury caused by the Coronavirus pandemic.

Purpose
Loans from this fund are designed to provide low-cost, flexible financing to assist with projects that will alleviate sudden and severe economic dislocation caused by the pandemic, provide permanent resources to support economic resiliency and further the long-term economic growth of the North Central Region.  Approximately $300,000 will be available for lending in each of the 6 counties to invest in projects which promote business revitalization and growth, enhance workplace safety, strengthen supply chains and sustain/create jobs.

Eligible Applicants

  • Existing for-profit businesses
  • Business and project located in Cameron, Clearfield, Elk, Jefferson, McKean and Potter Counties
  • Substantial U.S. citizen or legal-resident ownership
  • No delinquent debt or previous loss to the federal government, bankruptcy in last 10 years, unsatisfied judgments, tax liens or active collections

Eligible Uses
Priority projects will prevent, prepare for and respond to the Coronavirus pandemic or economic injury caused by the Coronavirus pandemic.  Projects can include:

  • Real estate acquisition only – Construction & Renovations are NOT eligible
  • Machinery & equipment
  • Working capital
  • Installation/implementation of CDC recommended safety measures
  • Technology

Ineligible Uses

  • Relocating jobs from one labor market area to another
  • Identical expenses for which other sources of federal funding have been or will be received; i.e., SBA Paycheck Protection Program (PPP) Loan or Economic Injury Disaster Loan (EIDL), CARES Act County Relief Block Grant
  • Construction & renovation projects
  • Projects that are speculative in nature
  • Acquire an equity position in a private business
  • Cash out to owners
  • Repay delinquent withholding taxes or other funds that should be held in trust or escrow
  • Gambling activities
  • Illegal activities

Repayment Terms

  • Loan is NON-FORGIVABLE
  • Loan payments are deferred for the first 6-months
  • Loan repayment is based on the useful life of the asset that is pledged as security for the loan, use of the loan proceeds and cash flow available to service debt:
    • Working capital – up to 5 years
    • Machinery & equipment – up to 10 years
    • Real estate – up to 20 years

Loan Amounts

  • RLF can function as the sole lender for loans up to $100,000 for an eligible project or can be combined with additional lending sources
  • Higher loan amounts may be considered but will be required to leverage bank and/or other sources of financing to fund eligible project costs

Interest Rates

  • 0% during 6-month payment deferral period
  • Loans with a repayment term of 7 years or less will have a fixed interest rate of .75%
  • Loans with a repayment term of greater than 7 years will have a fixed interest rate of 1.75%

Fees

  • Closing fee of 1.5% of loan amount is waived
  • Borrower is responsible for the cost of document preparation as charged by our solicitor, UCC filing fees, recording of mortgages and other charges incurred throughout the life of the loan including UCC continuations/terminations and mortgage satisfactions
  • No Application Fee
  • No penalty for early repayment

Requirements

  • Cash Flow:  Historical cash flow or projected cash flow must be adequate to service new and existing debt.
  • Credit History:  Business must have satisfactory history of meeting debt obligations in a timely manner.  Business owners must have reasonable and responsible personal credit history.
  • Management:  Company must have experienced management to successfully operate the business.
  • Collateral:  Loan amounts greater than $10,000 require collateral at the highest lien position available on the assets to be financed and/or existing assets.  Additional collateral may be required.
  • Guarantees:  All loans require personal/corporate guarantees of owners/shareholders with 20% or greater ownership in the business.
  • Insurance:  Hazard insurance required on secured assets.
  • Loan Payments:  ACH payments are required for submission of loan payments.

Application Timeline

  • Applications will be accepted through April 1, 2022 or until funds are exhausted.
  • Loan requests of $50,000 or less will undergo an expedited review and approval process by North Central Loan Program staff and RLF subcommittee
    • A commitment letter will be issued upon approval
    • Loan closing can be scheduled once the terms of the commitment are satisfied
  • Loan requests greater than $50,000 will be reviewed by the North Central Loan Committee of local economic development and bank representation from each county on the 2nd Thursday of each month.
    • To be considered for review at this meeting, a completed loan application and all required information is due to North Central by the 1st business day of the month.
    • Loan applications recommended by the Loan Committee for approval will be presented for final approval to lend funds to the Board of Directors at their regular meetings scheduled on the 4th Wednesday of each month.
    • A commitment letter will be issued upon Board approval
    • Loan closing can be scheduled once the terms of the commitment are satisfied

How Do I Apply?

Interested applicants are highly encouraged to complete and submit a Loan Pre-Application/Inquiry or contact Loan Program staff to discuss the project to determine eligibility PRIOR to submission of a full application.  The Pre-Application/Inquiry is available through our loan application portal: https://ncentral.portfol.com/Workflow/

You will need to register for an account then click on “Begin Loan Inquiry”.

  • If your project is determined to be eligible, you can complete and submit your application with all required information through our loan application portal:  https://ncentral.portfol.com/Workflow/

You will need to register for an account if you have not done so previously then click on “Begin EDA Cares”.

For more information or to discuss your project please contact:
Jennifer Hibbard, Loan Program Director
(814) 773-3162 ext. 3049