§ 2306. Capital development loans
Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 12 Pa.C.S.A. Commerce and TradeEffective: November 1, 2014
Effective: November 1, 2014
12 Pa.C.S.A. § 2306
§ 2306. Capital development loans
(a) Application.--A small business may submit an application and any applicable application fee to a certified economic development organization requesting a loan or line of credit for certain costs of a capital development project under 64 Pa.C.S. § 1121 (relating to common application process). The application shall be on the form required by the authority and shall include or demonstrate all of the following, in addition to the contents required under 64 Pa.C.S. § 1121(b):
(iii) If, when the applicant is a small business, the capital development project demonstrates a substantial likelihood of creating or preserving employment activities in this Commonwealth or if, when the applicant is an agricultural producer, the project demonstrates a substantial likelihood of enhancing and growing normal agriculture operations.
(i) A loan for land, buildings and machinery and equipment may not exceed $400,000 or 50% of the total capital development project costs, whichever is less. For the purposes of this subparagraph, capital development project costs incurred during the 12-month period prior to the date of submission of the application to the authority shall be considered part of the total capital development project costs.
(iii) Except for loans to agricultural producers, a loan must create or preserve one job for every $25,000 loaned. The authority may, by submitting notice to the Legislative Reference Bureau for publication in the Pennsylvania Bulletin, periodically update the amount under this subparagraph, based on changes in unemployment statistics, inflation, the authority's cash flow and the need to keep this Commonwealth and the businesses of this Commonwealth competitive.
(d) Approvals.--For applications which are approved, the authority shall draw an advance equal to the principal amount of the loan from the fund. The advance shall be forwarded to the certified economic development organization and, upon receipt by the certified economic development organization, shall become an obligation of the certified economic development organization. Prior to providing loan funds to the applicant, the certified economic development organization shall require the applicant to execute a note and to enter into a loan agreement. In addition to the requirements of subsection (e), the loan agreement shall include a provision requiring the recipient to use the loan proceeds to pay the costs of the capital development project. The authority may require the certified economic development organization to impose other terms and conditions on the recipient if the authority determines that they are in the best interests of this Commonwealth, including a provision requiring collateral for any penalty imposed under subsection (g).
(f) Loan administration.--A loan made under this section shall be administered in accordance with authority policies and procedures by the certified economic development organization which made the loan. Each certified economic development organization shall submit an annual report on the form required by the authority and which includes or demonstrates all of the following:
(h) Defaults.--The authority may by foreclosure take title to a capital development project which it financed if acquisition is necessary to protect a loan made under this section. The authority shall pay all costs arising out of the foreclosure and acquisition from moneys held in the fund. The authority may, in order to minimize financial losses and sustain employment, lease the capital development project. The authority may withdraw moneys from the fund to purchase first mortgages and to make payments on first mortgages on any capital development project which it financed where purchase or payment is necessary to protect a loan made under this section. The authority may sell, transfer, convey and assign the first mortgages and shall deposit any moneys derived from the sale of any first mortgages in the fund.
Credits
2004, Feb. 12, P.L. 99, No. 12, § 2, imd. effective. Amended 2014, Oct. 22, P.L. 2569, No. 161, § 4, effective Nov. 1, 2014.
12 Pa.C.S.A. § 2306, PA ST 12 Pa.C.S.A. § 2306
Current through Act 10 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
End of Document |