|Posted:||February 13, 2015 10:14 AM|
|From:||Representative W. Curtis Thomas|
|To:||All House members|
|Subject:||Modernizing and streamlining the Second Stage Loan Program|
|In the near future, I plan to introduce legislation that would modernize and streamline Pennsylvania’s Second Stage Loan Program, while making it easier for businesses to access capital.
The Second Stage Loan program provides loan guarantees to commercial lending institutions that make loans to life sciences, advanced technology or manufacturing businesses located in Pennsylvania. It is administered by the Commonwealth Financing Authority to assist early and mid-stage businesses meet working capital needs during the critical early years of establishment, growth and expansion. In many cases, because of a lack of business history, banks may be reluctant to extend lines of credit or working capital financing to these companies. The program provides banks with an extra measure of security to encourage them to work with these companies.
Currently, only businesses that are at least two years but less than eight years old are eligible to participate. My legislation would change that requirement to allow businesses that have existed more than seven years to participate. The program has a current capacity of $46.6 million that is available and this minor change in language would make the Second Stage Loan Program not only more meaningful to lenders, but also would help more businesses access the critical working capital they need to grow.
Additionally, my proposal would give the CFA the ability to determine the maximum guarantee amount and percentage, while retaining the requirement that no guarantee may exceed $1 million for any one loan. The loans will terminate at the end of seven years.
I have worked with the Department of Community and Economic Development in drafting the language in my proposed legislation to improve this valuable tool for businesses in Pennsylvania.
Please join me in co-sponsoring this legislation.
Introduced as HB810