(a) Application.--A person may submit an application and any applicable application fee to a certified economic development organization requesting a loan for certain costs of a capital development project which will be used in export activities under 64 Pa.C.S. § 1121(a) (relating to common application process). The application must be on the form required by the authority and must include or demonstrate all of the following, in addition to the contents required under 64 Pa.C.S. § 1121(b):

(1) The name and address of the applicant.

(2) A statement of the amount of loan assistance sought.

(3) A statement of the capital development project, including a detailed statement of the cost of the project.

(4) A financial commitment from a responsible source for any cost of the capital development project in excess of the amount requested.

(5) A statement that the loan, if approved, would not supplant funding from private sector sources on commercially reasonable terms.

(6) Any other information required by the authority.

(b) Review.--Upon receipt of a completed application, the authority shall investigate and determine all of the following:

(1) If the applicant is an export business.

(2) If the project is a capital development project.

(3) The ability of the applicant to meet and satisfy the debt service as it becomes due and payable.

(4) The existence and sufficiency of collateral for the loan.

(5) Relevant criminal and credit history and ratings of the applicant as determined from outside credit reporting services and other sources.

(6) Number of employment opportunities to be created or preserved by the proposed capital development project.

(7) If the applicant complied with all other criteria established by the authority.

(c) Approvals.--If the authority is satisfied that all requirements have been met, the authority may approve the loan request. A loan approved under this section may not exceed $350,000. The authority shall notify the applicant and, if applicable, the certified economic development organization of its decision. The authority shall reserve an amount equal to the principal amount of the loan within the fund or the special account authorized by section 2304(c)(2) (relating to fund and accounts). Prior to providing funds to the applicant, the authority shall require the applicant to execute a note and enter into a loan agreement. In addition to the requirements of subsection (d), the loan agreement shall include a provision requiring the recipient to use the loan proceeds to pay the costs of the capital development project. The authority may impose other terms and conditions on the recipient if the authority determines they are in the best interests of this Commonwealth, including any of the following:

(1) A provision requiring collateral for any penalty imposed under subsection (f).

(2) A provision requiring the person to be eligible for an insurance policy.

(3) A provision requiring the loan to be guaranteed by the Working Capital Guaranty Program offered by the Ex-Im Bank.

(4) A provision requiring an export credit sales contract insured by an insurance policy.

(d) Loan terms.--A loan agreement entered into in accordance with subsection (c) shall do all of the following:

(1) State the collateral securing the loan. All loans shall be secured by lien positions on collateral at the highest level of priority as may be determined by the authority.

(2) State the repayment period as determined by the authority.

(3) State the interest rate as determined by the authority.

(e) Loan administration.--A loan made under this section shall be administered in accordance with authority policies and procedures.

(f) Penalty.--

(1) Except as provided in paragraph (2), the authority shall impose a penalty upon a recipient if the recipient fails to carry out the export activities specified in its approved application.

(2) The authority may waive the penalty required by paragraph (1) if the authority determines that the failure was due to circumstances outside the control of the recipient.

(3) The amount of the penalty imposed under paragraph (1) shall be equal to an increase in the interest rate to 2% greater than the current prime interest rate for the remainder of the loan.

(g) Defaults.--The authority may, by foreclosure, take title to a capital development project which it financed if acquisition is necessary to protect a loan made under this section. The authority shall pay all costs arising out of the foreclosure and acquisition from money held in the fund or a special account authorized by section 2304(c)(2). The authority may, in order to minimize financial losses and sustain employment, lease the capital development project. The authority may withdraw money from the fund or a special account authorized by section 2304(c)(2) to purchase first mortgages and to make payments on first mortgages on any capital development project which it financed if purchase or payment is necessary to protect a loan made under this section. The authority may sell, transfer, convey and assign the first mortgages and shall deposit any money derived from the sale of any first mortgages in the fund or a special account authorized by section 2304(c)(2).

(Oct. 22, 2014, P.L.2569, No.161, eff. Nov. 1, 2014)

2014 Amendment. Act 161 amended subsecs. (a), (b) intro. par. and (7), (c) intro. par., (d), (e), (f)(1) and (2) and (g).

Cross References. Section 2310 is referred to in section 2310.1 of this title.