E-Newsletter
EDC Finance Corporation

EDC Finance Corporation Monthly E-newsletter

Our e-newsletter profiles a service or program that EDC and EDC Finance provide to the business and agriculture communities. To subscribe, email Jean Rehrig or call 717.397.4046.

December 2009

Time to Invest in Lancaster City - 3.25% Fixed Rate Financing Available for New Projects

With the anticipation that the worst of our nation's economic downturn is behind us, the Pennsylvania Industrial Development Authority (PIDA) is looking to incentivize eligible economic development projects throughout Lancaster County, with the best financing options focused on Lancaster City. Companies or developers can now acquire, construct, and renovate Lancaster City commercial real estate by financing 60-70% of those project costs at a low 3.25% fixed interest rate for 15 years. PIDA's new financing offer for the City of Lancaster will allow commercial projects to save hundreds of thousands of dollars in financing costs and will provide a fixed cost of capital to hedge against any long term inflation concerns.

A quick look at the numbers shows that projects borrowing $1,000,000 in PIDA funds will save almost $525,000 in borrowing costs over the life of the loan compared to typical financing options, all while maintaining a lower monthly debt service requirement.

Comparison Amt Rate Term Mo Payment Total Loan Interest

$1,000,000 6.50% 20 yrs $7,455 $789,375

$1,000,000 3.25% 15 yrs $7,027 $264,804

Total Savings $524,571

Under the same calculations, loans for the PIDA maximum limit of $2,000,000 will save projects about $1,050,000 in borrowing costs, while a smaller loan of $500,000 will save about $260,000. The significance of those numbers certainly provides projects with location flexibility a reason to consider an investment in the heart of Lancaster's urban core.

The following types of projects qualify for PIDA financing:

Manufacturing
Industrial
Warehouse & Distribution
R&D Facilities
Advanced Technology
Agri-Business
Computer Operations Centers
National Headquarters Offices
Keystone Innovation Zone Companies

Eligible PIDA project costs include:

Land Acquisition
Construction
Engineering/Architectural
Site Preparation & Testing
Renovation
Legal and other related costs

Please keep in mind that the remaining 30-40% of project costs not financed by PIDA do not have to be injected into the project in the form of cash. A financing structure can be arranged with a local bank or another EDC Finance lending option to fill all but 10% of the remaining costs that need to be financed.

PIDA financing in Lancaster County is administered by EDC Finance Corporation and is available throughout all of Lancaster County, however, non-city PIDA financing is capped at 50% of project costs with a 4.25% interest rate. Projects are encouraged to call and talk to EDC Finance staff in order to make final eligibility determinations and learn how to begin the loan approval process. Projects are also asked to create or retain one full time job for every $35,000 that is borrowed from PIDA.

Please remember to visit the EDC Finance Corporation website at www.edcfinancecorp.com for the latest information on current interest rates for all programs and for more general information on funding resources available for Lancaster County projects.