Pennsylvania has increased the PIDA Small Business First real estate and construction loan limit to $1 million and eliminated the program’s 1% commitment fee on all loan programs under the PIDA umbrella. Learn what the changes could mean for businesses in Cumberland, Dauphin and Perry counties.
Pennsylvania small businesses planning to purchase real estate, construct a new facility, or renovate an existing property may now have access to significantly more low-interest financing through the Pennsylvania Industrial Development Authority’s Small Business First (PIDA-SBF) program.
The PIDA-SBF real estate and construction loan limit has increased from $400,000 to up to $1 million- or 50% of eligible project costs- whichever is less. The change represents a 150% increase in the maximum loan amount and brings the program more closely in line with today’s construction and real estate costs.
PIDA has also eliminated the 1% commitment fee previously charged on loans exceeding $400,000. For a business receiving the full $1 million, eliminating that fee could reduce upfront financing costs by as much as $10,000.
What changed?
| Financing category | Updated PIDA-SBF limit |
| PIDA-SBF real estate acquisition, construction and renovation | Increased to up to $1 million or 50% of eligible project costs, whichever is less |
| PIDA-SBF machinery and equipment | Remains at up to $400,000 or 50% of eligible project costs, whichever is less |
| PIDA commitment fee | Eliminated |
The updated terms apply to new applications as well as loans currently in process that have not yet received final PIDA approval.
The $1 million limit does not apply to every PIDA loan
Importantly, the new $1 million PIDA-SBF limit does not replace the higher financing available through the broader traditional PIDA program.
Certain qualifying manufacturing, industrial, healthcare, agricultural-processing, and research and development projects may continue to qualify for traditional PIDA financing of up to $2 million- or 50% of eligible real estate and construction costs- whichever is less.
The financing available to a particular borrower will depend on the business, its industry, the proposed project, and the applicable PIDA program. Businesses and lenders should therefore speak with CREDC before assuming that $1 million is the maximum financing available.
Why this matters for small businesses
PIDA provides low-interest financing for eligible Pennsylvania businesses investing in growth, facilities and job creation, or retention. Loans can support land and building acquisitions, construction and renovation, machinery and equipment purchases, and certain working-capital needs.
The previous $400,000 PIDA-SBF limit had remained in place since 2014, even as the cost of land, materials and construction increased substantially. For businesses undertaking larger projects, the expanded limit may allow a greater portion of eligible costs to be financed at PIDA’s below-market interest rates.
PIDA financing is typically combined with financing from a participating bank and investment from the borrower. Increasing the PIDA-SBF contribution can help businesses reduce borrowing costs, preserve working capital, and build a stronger overall financing package.
Who may be eligible?
The Small Business First program generally serves eligible businesses with 100 or fewer full-time employees worldwide. Qualifying industries may include:
- Agriculture and agricultural processing
- Manufacturing and industrial enterprises
- Construction
- Hospitality
- Child day care
- Research and development
- Recycling
- Computer-related services
- Certain retail and service businesses
Eligibility depends on the business, project, location and proposed use of funds. Underwriting, collateral, private financing, job creation or retention, funding availability, and other program requirements continue to apply.
CREDC can help businesses navigate the process
PIDA applications must be prepared and submitted through a Certified Economic Development Organization (CEDO). The Capital Region Economic Development Corporation (CREDC) is the designated CEDO serving Cumberland, Dauphin and Perry counties.
CREDC works directly with businesses and their banking partners to evaluate financing options, determine potential eligibility, and package qualifying applications for PIDA’s consideration. Because each program and project is different, involving CREDC early in the planning process can help a business identify the most advantageous financing structure before commitments are finalized.
Businesses considering a property purchase, construction project, renovation, or equipment investment are encouraged to connect with the Chamber & CREDC team to explore the full range of financing that may be available.
Questions? Contact Anita Weikel, MPA, Economic Development Lending Officer | 717-213-5036 | aweikel@hbgrc.org
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ABOUT HARRISBURG REGIONAL CHAMBER & CREDC
For 140 years, the Harrisburg Regional Chamber & CREDC has served as the region’s catalyst for economic prosperity. The organization combines business, community, and economic development services to enhance the region’s vitality and livability. The Chamber is a five-star accredited chamber through the U.S. Chamber of Commerce—a distinction held by fewer than 1 percent of chambers nationwide. CREDC is the region’s toolbox for economic development. It is the only Certified Economic Development Organization (CEDO) approved by the Commonwealth’s Department of Community and Economic Development to perform economic development activities regionally using Pennsylvania’s funding programs across Cumberland, Dauphin, and Perry counties.
