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Pennsylvania Business Finance Grant Programs

Opportunity Grant Program (OGP)

Purpose

The Opportunity Grant Program (OGP) provides flexible and effective economic development financing to preserve and expand existing industry and attract other economic development prospects to the Commonwealth.

Eligible Applicants

Private companies that are involved in agricultural, industrial, manufacturing, research and development, export service activities, firms establishing a national or regional headquarters, or any other enterprise that offers a significant economic impact to the Commonwealth, as determined solely by the Department, are eligible for Opportunity Grants. Municipalities (boroughs, townships, towns, counties, cities, home rule), industrial development authorities and corporations, municipal authorities, redevelopment authorities and private developers may receive OGP assistance to conduct eligible activities on behalf of an eligible private company.

Eligible Uses of Funds

All costs financed through the OGP must be necessary for the operation of eligible private companies at specific sites in Pennsylvania. Funds may be used for job training, construction or rehabilitation of infrastructure, acquisition of land, buildings, and rights-of-way, construction or rehabilitation of buildings, purchase or upgrading of machinery and equipment, working capital, site preparation including demolition and clearance, environmental assessments, remediation of hazardous materials and architectural and engineering fees up to 10% of the OGP award.

Limitations

Applicants may not receive OGP assistance more than two consecutive fiscal years for the same company expansion or location project.

Conditions

Eligible private companies must meet all of the following conditions:

Collateral

In order to ensure compliance with the grant agreement terms, DCED may require the private company to secure the OGP assistance with a mortgage lien, a letter of credit, or other collateral for a period of five years following the final disbursement of OGP funds. Should a company not comply, it will be liable for a penalty of up to the full amount of the assistance plus an additional penalty of up to 10% of the grant amount awarded by DCED.

Application Process

The private company must submit to DCED a detailed Letter of Intent on the company’s letterhead that is signed by the chief executive officer or other officer capable of making commitments for the company. DCED will determine eligibility for Opportunity Grant financing by evaluating each request according to established criteria, such as the number and quality of jobs being preserved or created, the economic conditions of the region where the project is located, and the potential impact on other Commonwealth businesses. Every attempt will be made to have an equitable distribution of projects throughout the Commonwealth.

Rail Freight Assistance

Summary

Grants to build or repair rail lines or spurs

Eligibility

Eligible Uses

Rail freight maintenance and construction

Where to Apply

PennDOT - Bureau of Rail Freight

All applications must be filed electronically. Visit www.dot.state.pa.us for instructions

Amounts

Terms

Industrial Sites Reuse Program (ISRP)

Purpose

The Industrial Sites Reuse Program (ISRP) encourages the cleanup of environmental contamination at industrial sites by providing grants and low-interest loans for environmental assessments and remediation, allowing the sites to again become productive.

Eligible Applicants

ISRP funds may be used only by eligible applicants who did not cause or contribute to environmental contamination at sites where industrial activity was conducted prior to July 18, 1995. Municipalities, municipal authorities, redevelopment authorities and economic development agencies that are applying for projects located in: (a) targeted communities as designated by the Secretary of the Department of Community and Economic Development (DCED); and (b) cities of the first class, second class, second class A, and third class may apply on their own behalf or on behalf of a private company or private developer for grants to conduct environmental assessments.

Municipalities, counties, municipal authorities, redevelopment authorities and economic development agencies that own the former industrial site and will oversee the cleanup of the site may apply for grants for environmental assessments and for remediation of hazardous substances.

All eligible applicants mentioned above, as well as private companies and investor/developers, can apply for loans for environmental assessments and remediation.

Eligible Uses of Funds

The funds may be used for Phase I, II, and III Environmental Assessments and Removal/Remediation of Hazardous Substances.

A Phase I Environmental Assessment is defined as a qualitative review of the site, using readily available information, field observations and sometimes limited screening of samples of soils and water. It includes pre-audit, on-site and post-audit activities.

Phase II and III Environmental Assessments are defined as in-depth field investigation, site characterization, sampling, testing and analysis to determine the source, nature and extent of the problem, the risks involved, and the identification of the cost of remediation and possible cleanup alternatives.

Funds may be used for the Removal/Remediation of Hazardous Substances and contaminants in accordance with the remediation standards established under Act 2 of 1995, the Land Recycling and Environmental Remediation Standards Act.

Limitations

The amount of grant funds available for projects each fiscal year is limited by statute. After all available grant funds are committed, applicants may request loan funds or reapply the following fiscal year for a grant.

The maximum amount to be awarded for any assessment project will not exceed 75% of the total cost of the assessment, or $200,000, in a single fiscal year, whichever is less.

The maximum amount to be awarded for any remediation project will not exceed 75% of the total cost of remediation, or $1 million, in a single fiscal year, whichever is less.

Conditions

The proposed project must comply with local land use, zoning and subdivision ordinances. Funds for remediation projects will not be disbursed until the applicant takes title to the land. Any costs incurred prior to the grant or loan offer being made will be ineligible for reimbursement.

DCED reserves the right to approve or reject contracts between the applicant and consultants for work that will be paid for with ISRP funds. No substantial changes can be made in an approved project without prior written consent by DCED.

The Departments of Community and Economic Development and Environmental Protection shall have free access to full and accurate project records and the right to inspect all project work and other relevant data and records. Before final payment of the grant or loan is made, the applicant must submit a copy of the completed site assessment report to DCED.

Rates and Terms

The interest rate on all ISRP loans will be 2% with the term for loans used for assessment not exceeding five years. The term for loans used for remediation will depend on the nature and duration of remediation measures, but will not exceed 15 years. All loans must be sufficiently secured.

Application Process

Applicants must submit a Letter of Intent (LOI) to DCED outlining a general description of the project and its anticipated public benefits. The Departments of Community and Economic Development and Environmental Protection will review the LOI. If the proposed project meets the program eligibility requirements, an application is forwarded to the applicant for completion and submission to DCED.

Infrastructure Development Program (IDP)

Purposes

The Infrastructure Development Program (IDP) provides grants and loans for infrastructure construction and rehabilitation which is necessary to complement capital investment by private companies and private developers.

Eligible Applicants

Municipalities (boroughs, townships, towns, counties, cities, home rule), industrial development authorities and corporations, municipal authorities, redevelopment authorities and local development districts may apply for IDP assistance on behalf of eligible private companies and private developers. Private companies and developers may not apply directly for IDP funds.

Private companies engaged in agricultural, industrial, manufacturing, research and development and export service enterprises are eligible to leverage IDP assistance provided: they locate or expand at a Pennsylvania site, they invest private capital at the site of at least $2 for every $1 of assistance, and they create one new full-time job for each $25,000 of assistance received or 10 new full-time jobs (whichever is greater) at the site within five years after the assistance is awarded. Private companies seeking IDP loans for private infrastructure improvements must retain their existing number of employees for five years. Private developers may leverage IDP assistance if they are developing real estate for use by more than one eligible company or if they are redeveloping former commercial sites for new commercial uses.

Eligible Uses of Funds

Grants must be used for eligible public-owned infrastructure improvements that are accessible to more than one user. Grants also may be awarded to an applicant who in turn may loan them to a private company or private developer for infrastructure improvements on privately owned property in targeted geographic areas designated by the Department of Community and Economic Development (DCED).

Individual loans may be used for eligible privately owned infrastructure improvements.

Limitations

Conditions

It must be demonstrated that the infrastructure improvements are necessary for the efficient, cost-effective operation of a private company or successful marketing of the facility by a private developer and that the project would not be possible without IDP funds. The applicant, private company or private developer must be able to repay the loan and provide adequate security to cover the cost of the loan, and the private company or private developer must be financially sound and able to fulfill its commitments to DCED.

Projects must be completed within the timeframe established in the grant or loan agreement and must be consistent with the economic development plans, complying with code enforcement, building inspection and all other local requirements.

Rates and Terms

Interest rates and terms will be set by DCED, but no term will exceed 15 years. Interest rates in counties where the lowest interest under the Pennsylvania Industrial Development Authority (PIDA) program is applicable will receive a lower IDP interest rate than projects located in other counties of the Commonwealth.

Principal and interest payments for loans made by public entity applicants to a private developer or private company may be retained by the applicants who service targeted communities and who demonstrate their capability to successfully administer a DCED-approved revolving loan fund.

Application Process

An eligible applicant should submit a Single Application for Assistance on behalf of an eligible private company or private developer to DCED. Application materials are contained in the IDP Guidelines.

Child Care Challenge Grant Program (CCCGP)

Purpose

The Child Care Challenge Grant Program (CCCGP) provides grants to nonprofit organizations to improve access to childcare in underserved areas.

Eligible Applicants

Nonprofit childcare organizations that are in good standing with, and licensed, or in the process of being licensed by the Department of Public Welfare (DPW).

All applicants must demonstrate that there is a child care capacity shortage within the proposed service area, that there is broad community support for expansion efforts, and that they have the ability to secure the balance of funds needed to complete the project.

Eligible Uses of Funds

Funds may be used for the following purposes:

Utility cost, consumable supplies, real property acquisition, new construction and building additions are not eligible costs.

Limitations

The applicant may not receive more than one grant per project but is not precluded from receiving funds for additional projects. The maximum total grant amount is $500,000 in any 12-month period, and is limited to 75% of the eligible cost. The minimum grant level is $50,000. The applicant must serve or agree to serve children from low-income families or cash assistance eligible families whose income does not exceed 235% of the Federal Poverty Income Guidelines if childcare slots are available.

Preference will be given to childcare organizations that provide services during non-traditional hours and that serve disabled children.

Conditions

The applicant must cooperate with the Regional Child Care Resource Developer (CCRD). Upon request of DCED, the applicant must provide DCED with access to project records and provide DCED with an annual project review. Funds will be disbursed on a reimbursement basis.