Pa. Extends Reduction of Rates on Business Loans
HARRISBURG, Pa. -- Pennsylvania has extended the reduction in interest rates for four business loan programs to encourage more economic growth and job creation. The new rates initially were in place for applications received through March 31 and the three-month extension will apply the new rate to applications received through June 30.
Last December, to address a key recommendation of the Governor's Manufacturing Advisory Council, the Department of Community and Economic Development lowered the interest rates for four business loan programs. The interest rates for the Machinery and Equipment Loan Fund, the Small Business First Program, the Pollution Prevention Assistance Program and the Export Financing Program were reduced to 1.50% from 2.75%. The department also waived the fees it charged borrowers.
Since the interest rate reduction was initially announced, 37 Small Business First loan applications have been submitted to the department for consideration. In 2011, there were only 34 applications received in the entire year and 38 applications the year prior. The additional three loan programs had an uptick in applications over the last three months as well.
"Access to capital is a critical component of any successful manufacturer and often the determining factor of whether a job-creating project moves forward," said C. Alan Walker, department secretary. "By reducing interest rates and the cost of borrowing, we are encouraging new growth through providing critical access to capital and freeing up operating cash to support new job creation."
A Governor's Manufacturing Advisory Council report sent to legislators last August outlined 15 key recommendations, including the need to improve access to capital. The council identified that 45% of small manufacturers accessed debt capital in 2010 and that 78% of small manufacturers are hurt by a lack of access to capital, Walker noted.
The council is composed of 24 members who range across various manufacturing interests that include heavy machinery, minerals, pharmaceuticals, plastics, steel and textiles.
Published by The Business Journal, Youngstown, Ohio.
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