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Second Stage Loan Program - 64 Pa. Cons. Stat. § 1553

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     § 1553.  Second Stage Loan Program.
        (a)  Establishment.--There is established a program to be
     known as the Second Stage Loan Program. The program shall
     provide loan guarantees to commercial lending institutions that
     make loans to life sciences, advanced technology or
     manufacturing businesses.
        (b)  Application for enrollment.--A commercial lending
     institution may apply for enrollment in the program authorized
     by this section. The application shall be on the form prescribed
     by the board and shall include or demonstrate all of the
     following:
            (1)  The name and address of the commercial lending
        institution and the name and title of the individual who will
        serve as the point of contact for the commercial lending
        institution.
            (2)  A statement defining the service area of the
        commercial lending institution.
            (3)  A statement describing the commercial lending
        activities engaged in by the commercial lending institution
        and how the institution intends to expand those activities as
        a result of its participation in the program authorized by
        this section.
            (4)  Any other information required by the board.
        (c)  Enrollment approval.--Upon being satisfied that all
     requirements have been met, the board may enroll the commercial
     lending institution in the program authorized by this section,
     and, if enrolled, the authority shall execute a master guarantee
     agreement in favor of the commercial lending institution. In
     addition to any other terms and conditions required by the
     board, the master guarantee agreement shall provide for the
     following:
            (1)  The procedure for the submission of a claim for
        payment by the commercial lending institution. This procedure
        shall require that the commercial lending institution
        demonstrate that it has exhausted all available remedies
        against the borrower, other guarantors and collateral for the
        loan before seeking payment under the agreement.
            (2)  A requirement that a percentage of any moneys
        recovered by the commercial lending institution subsequent to
        any payment made under the master guarantee agreement by the
        authority be remitted to the authority.
            (3)  Periodic reporting requirements by the commercial
        lending institution regarding itself and regarding the loans
        for which guarantee certificates have been issued under this
        section.
        (d)  Application for guarantee.--A commercial lending
     institution enrolled in the program authorized by this section
     may submit an application to the authority for the guarantee of
     a proposed loan. The application shall be on the form prescribed
     by the board and shall include or demonstrate all of the
     following:
            (1)  The name and address of the borrower, the type of
        business the borrower conducts, the location and age of the
        business and the names and addresses of the principals of the
        borrower.
            (2)  The number of projected new or retained employees of
        the borrower as a result of the loan.
            (3)  A copy of the borrower's last two years of financial
        statements prepared or reported on by an independent
        certified public accountant.
            (4)  A statement describing the purpose of the loan, the
        requested amount of the loan, a copy of the commercial
        lending institution's commitment letter and applicable credit
        underwriting that supports the repayment of the loan, as well
        as the collateral and other guarantees offered by the
        borrower to support the loan.
            (5)  Any other information required by the board.
        (e)  Application review.--
            (1)  The board shall review the application to determine
        all of the following:
                (i)  That the borrower owns and operates a life
            sciences, advanced technology or manufacturing business.
                (ii)  That the borrower's business has been in
            existence for at least two years but no more than seven
            years at the time of application.
                (iii)  That the borrower is financially responsible
            and has the ability to repay the loan.
                (iv)  That the use of loan proceeds by the borrower
            will result in jobs being created or retained within this
            Commonwealth.
                (v)  That the borrower's business is located within
            the commercial lending institution's service area and
            within this Commonwealth.
                (vi)  That the borrower and the commercial lending
            institution have met all other requirements established
            by the board.
            (2)  Upon being satisfied that all requirements have been
        met, the board may approve the guarantee, and, if approved,
        the authority shall issue a guarantee certificate for the
        loan to the commercial lending institution stating the terms
        and amount of the guarantee.
            (3)  The board may establish a subcommittee composed of
        one or more members of the board and staff of the department
        to review and approve applications for guarantees under this
        section.
        (f)  Limitations.--
            (1)  During the first two years of the term of a loan for
        which a guarantee certificate has been issued, the guarantee
        may not exceed 50% of the outstanding principal amount of the
        loan. From the end of year two through either the end of year
        seven or the end of the term of the loan, whichever occurs
        first, the guarantee may not exceed 25% of the outstanding
        principal amount of the loan. The guarantee will terminate at
        the end of seven years.
            (2)  At no time may a guarantee exceed $1,000,000 for any
        one loan.

        Cross References.  Section 1553 is referred to in section
     1543 of this title.

Last modified: November 27, 2007