2905 - Eligibility for loans; terms and conditions.
§ 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.