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Eligibility for loans; terms and conditions - 12 Pa. Cons. Stat. § 2905

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     § 2905.  Eligibility for loans; terms and conditions.
        (a)  Loans; general rules.--The secretary may make advances
     from the fund, subject to the terms, conditions and restrictions
     provided under this chapter, for the purpose of making loans to
     business enterprises involved in industrial processes, mining,
     manufacturing, production agriculture, information technology,
     biotechnology, service as a medical facility or other industrial
     or technology sectors, as defined by the department, to acquire
     and install new machinery and equipment or upgrade existing
     machinery and equipment, including the acquisition, application
     and utilization of computer hardware and software.
            (1)  All loans shall be subject to all of the following
        conditions:
                (i)  Be made to eligible business enterprises under
            the provisions of this chapter.
                (ii)  Have a maximum loan ceiling of $5,000,000 or
            50% of the cost of the project, whichever is less.
                (iii)  Be limited to the purchase and installation of
            new equipment and machinery or the upgrade of existing
            machinery and equipment. This subparagraph includes the
            acquisition, application and utilization of computer
            hardware and software.
                (iv)  Be limited to projects that demonstrate the
            creation or retention of one job for every $25,000
            received from the fund. This subparagraph does not apply
            to loans made to business enterprises involved in
            production agriculture or to loans made to medical
            facilities.
                (v)  Have an interest rate which shall be established
            by the secretary.
                (vi)  Have a term of not in excess of ten years.
            (2)  For loans to medical facilities, loan funds may be
        used only to finance the acquisition, installation and
        utilization of machinery and equipment, including computer
        hardware and software components, to be used in the
        prescribing and dispensing of medication for medical facility
        patients.
        (b)  Restrictions.--No loans shall be made that do any of the
     following:
            (1)  Cause, aid or assist in, directly or indirectly, the
        relocation of any business enterprise from one part of this
        Commonwealth to another unless there is at least a 25%
        increase in net employment.
            (2)  Supplant funding that is otherwise available
        expeditiously from private sector sources on commercially
        reasonable terms.
            (3)  Be for the purpose of refinancing any portion of the
        total project cost or other existing loans or debt.
            (4)  Be for the purpose of financing projects located
        outside the geographic boundaries of this Commonwealth.
            (5)  Be for the purpose of paying off a creditor that is
        inadequately secured and is in a position to sustain a loss.
            (6)  Be for the purpose of repaying a debt owed to a
        small business investment company.
            (7)  Provide funds for speculation in any kind of
        property, real or personal, tangible or intangible.
        (c)  Security.--All loans shall be secured by no less than a
     second lien position on the equipment purchased and other
     sufficient collateral as determined by the secretary.

        Effective Date.  Section 6(1)(i) of Act 12 of 2004 provided
     that section 2905 shall take effect upon publication of the
     guidelines required by section 2912.

Last modified: November 27, 2007