Corbett Administration Announces Extended Interest Rate Reduction to Spark Economic Growth and Job Creation

News provided by

Pennsylvania Department of Community & Economic Development

Apr 03, 2013, 09:22 ET

HARRISBURG, Pa., April 3, 2013 /PRNewswire-USNewswire/ -- The Department of Community and Economic Development (DCED) Secretary C. Alan Walker today announced DCED has extended the reduction in interest rates for four business loan programs to encourage new economic growth and job creation.

"Governor Corbett's pro-growth policies are a bold statement that Pennsylvania is committed to growing our businesses and improving the economic base of our communities," Walker said.

The new rates were initially in place for applications received through March 31, 2013. The three month extension will apply the new rate to applications received through June 30, 2013

In December, to address a key recommendation of the Governor's Manufacturing Advisory Council (GMAC), DCED 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 from 2.75 percent to 1.50 percent. DCED also waived its fees charged to the borrowers.

Since the interest rate reduction was initially announced, 37 Small Business First loan applications have been submitted to DCED 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," Walker said. "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."

The GMAC report sent to Corbett and the General Assembly in August outlined 15 key recommendations, including the need to improve access to capital. The council identified that 45 percent of small manufacturers accessed debt capital in 2010 and that 78 percent of small manufacturers are negatively affected by a lack of access to capital.

The GMAC is comprised of 24 council members ranging from a cross-section of manufacturing interests including heavy machinery, minerals, pharmaceuticals, plastics, steel and textiles. The council, supported by Team Pennsylvania Foundation, also includes three members of manufacturing trade associations and one from the Industrial Resource Center.

For more information about DCED and other Jobs First PA initiatives, visit newPA.com/jobs1st or call 1-866-466-3972.

Media contact: Steve Kratz, 717-783-1132

SOURCE Pennsylvania Department of Community & Economic Development