Section 81.131. Amount and terms of loans

(a) Maximum amount of loan.

(1) The maximum amount of a loan for a project may not exceed $250,000, except as otherwise provided in paragraphs (2)—(4).

(2) If a project is located within an Enterprise Zone as designated by the Department or is located within a redevelopment area, the maximum amount of a loan may not exceed $350,000, except as otherwise provided in paragraphs (3) and (4).

(3) If a project involves an industrial enterprise, a manufacturing enterprise, advanced technology, a regional or National franchise, international trade, or business acquisitions, and meets the requirements of § 81.125 (relating to additional conditions for certain loans), the maximum amount of a loan may not exceed $500,000, except as otherwise provided in paragraph (4).

(4) If a project, which meets the criteria in paragraph (3), is located within an Enterprise Zone as designated by the Department or is located within a redevelopment area, the maximum amount of a loan may not exceed $750,000.

(b) Interest rate. The loan shall be at an interest rate to be determined by the Board, but the interest rate may not be more than one-half of the prevailing prime rate on the date of loan approval and not less than 4%.

(c) Creation or preservation of jobs.

(1) For every $15,000 in loan proceeds of $100,000 or less, a project shall create or preserve at least one permanent full-time job, or the equivalent in part-time jobs. The jobs shall be created or preserved, without exception, within 3 years of the date that any amount of the proceeds from the loan are first disbursed to the loan recipient.

(2) For every $15,000 in loan proceeds over $100,000, a project shall create at least one permanent full-time job or the equivalent in part-time jobs. The jobs shall be created, without exception, within 3 years of the date that any amount of the proceeds from the loan are first disbursed to the loan recipient.

(3) If a project fails to meet its job projections within 3 years from the date of closing due to factors within the control of the enterprise, the Board may reset the interest charged on the loan at a rate not to exceed double the amount of the original interest rate.

(4) For purposes of this section, the phrase ‘‘the equivalent in part-time jobs’’ means at least 35 total hours per week of part-time labor.

(d) Limitation on loans. An applicant may not request nor receive more than the maximum loan amount set forth in subsection (a)(1) and (2) within 1 year of the date of the loan closing.

The provisions of this § 81.131 adopted July 11, 1975, effective July 12, 1975, 5 Pa.B. 1781; amended February 15, 1980, effective February 16, 1980, 10 Pa.B. 760; amended February 6, 1987, effective February 7, 1987, 17 Pa.B. 634; amended December 24, 1992, effective December 26, 1992, 22 Pa.B. 6106; corrected January 22, 1993, effective December 26, 1992, 23 Pa.B. 462; amended February 5, 1993, effective February 6, 1993, 23 Pa.B. 628. Immediately preceding text appears at serial pages (175927) to (175929).

Notation

Authority

The provisions of this § 81.131 amended under section 9 of the Pennsylvania Minority Business Development Authority Act (73 P. S. § 390.9).

Cross References

This section cited in 12 Pa. Code § 81.112 (relating to eligible projects); and 12 Pa. Code § 81.125 (relating to additional conditions for certain loans).