State rep. proposes eliminating "cumbersome" loan eligibility limitations
Published: February 8, 2010
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share thisState Rep. Rick Mirabito (D-Lycoming) said legislation he sponsored, which is "designed to help high-tech, life science and manufacturing businesses grow," has been received favorably by state Senate Democrats.
While outlining their budget priorities at a Harrisburg news conference Feb. 3, Senate Democrats said the state should do more to help businesses, including redesigning the Second Stage Loan Program to eliminate cumbersome loan eligibility limitations for growing firms.
"My H.B. 1597 would make changes to our Second Stage Loan Program to enable more high-tech and manufacturing businesses secure the capital they need to grow and create jobs," Mirabito said. "I am encouraged Senate Democrats are supportive of this effort and hope the bill receives the same bipartisan support in the state Senate as it did in the state House."
The Second Stage Loan Program is operated by the Pennsylvania Department of Community and Economic Development and guarantees loans made to life-science, manufacturing and technology businesses. The program currently restricts the loan guarantee amount to 50 percent for the first two years and then drops it to 25 percent for the remainder of the term. Loans can only be made to businesses that are between 2 and 7 years old, and loan amounts are capped at $1 million.
House Bill 1597, which passed unanimously in the House and is under consideration in the Senate Community, Economic and Recreation Development Committee, would guarantee 50 percent of Second Stage Loans for the life of the loan, increase the loan cap to $5 million and make it available to any business that is at least 2 years old.
"Because my bill would transfer $50 million from the underutilized Tax Increment Financing Guarantee Program to the Second Stage Loan Program, making these enhancements would cost taxpayers nothing, but could result in business growth and job creation in Pennsylvania," Mirabito said.
Mirabito noted in its five years of existence, the Second Stage program has issued only six loan guarantees
