7 Pa. Code § 106.5 – Program requirements.

(a) Loan size. The maximum loan amount for land, buildings, machinery and equipment is $750,000 or 50% of the total eligible project cost, whichever is less. The maximum loan amount for working capital is $100,000 or 50% of the total eligible project cost whichever is less. The minimum loan amount is $10,000.
(b) Other required investment. Loans will be made in conjunction with another source of financing for the eligible costs incurred, such as another lender or equity from the owners or investors. Matching lending sources shall have either equivalent or longer terms than the APDP loan.
(c) Loan security.
1. (1) Loans shall be secured at the highest lien position available on one or more of the following assets:
  1. (i) Land.
  2. (ii) Buildings.
  3. (iii) Machinery.
  4. (iv) Equipment.
  5. (v) Accounts receivable.
  6. (vi) Inventory.
2. (2) The Department may require personal or corporate guarantees or may require other types of collateral as circumstances allow. The Department must have a collateral position of no less than a second lien on the assets being funded by the APDP unless specifically waived in writing by the Department.
(d) Terms. Loans used for real estate will have a repayment period of up to 15 years. Loans used for machinery and equipment will have a repayment period of up to 7 years. Loans used for working capital will have a repayment period of up to 5 years. In projects where two or more uses of APDP funds are planned, loan terms may be blended. The Department may approve a loan package containing an ‘‘interest only’’ payment period not to exceed 24 months at the beginning of the project term with the regular payments starting at the end of this period. When an ‘‘interest only’’ payment period is approved the repayment period of the loan will be extended. The repayment periods noted in this subsection will begin at the end of the interest only period, that is, a loan approved with a 15-year repayment period and a 12-month interest only period would be repaid over an effective loan period of 16 years.
(e) Interest rates. An annual fixed rate of 2%.
(f) Fees.
1. (1) Fees charged to the borrower by brokers, finders, financing consultants and economic agencies are not eligible project costs, except the fees payable to the Department, if any, and fees and expenses charged to the borrower by the local service provider or ALO may be included as part of the eligible project cost.
2. (2) Reasonable loan processing fees may be charged to the borrower by the service provider or ALO, if they are set forth in the commitment letter for the loan. The local service provider or ALO will set the fees.
(g) Aggregate limits on APDP financing. A borrower may not receive more than $750,000 in new financing under the APDP program in any 12-month period.
1. (1) The borrower may not relocate from one area of this Commonwealth to another without at least a 25% increase in net employment. For purposes of this paragraph, no relocation will be deemed to be a relocation from one area of this Commonwealth to another that is either of the following:
  1. (i) Within the same county.
  2. (ii) Within the same labor market as determined by the United States Department of Labor.
2. (2) If the recipient of an APDP loan relocates outside of this Commonwealth, the balance of the APDP loan remaining shall be immediately payable to the Department.
(h) Priority. Projects containing any of the following factors will receive priority in the approval and funding process for a loan:
1. (1) Applicants with credit ratings containing no late payments or write-offs.
2. (2) Current aquaculture facilities that have been in business 5 years or more and are doing environmental stewardship enhancements or facility upgrades.
3. (3) Facilities that currently have environmental stewardship enhancements such as bird and animal enclosures, secondary escapement prevention and discharge treatment structures such as settling basins and artificial wetlands.
4. (4) Principals having commercial aquaculture experience in a proven profit-making venture as documented by state and Federal tax returns showing taxes paid on business profits.
5. (5) Farmers of some other agricultural product wishing to transition to, or integrate, aquaculture in their farm operation.
6. (6) Equipment or management practices that improve the production efficiency of an operation.
7. (7) Applications that include environmental stewardship enhancements.
8. (8) Projects whose principals are Commonwealth residents will receive first consideration for funding.
(i) Participation agreement. The approved, signed contract for an APDP activity will constitute the participation agreement. An approved APDP loan program applicant shall enter into a contract. The contract will set forth the amount of funds and other terms and conditions as the Department may require. To be considered for an APDP loan, an applicant shall submit an application on a form provided by the Department. Upon receipt of a completed, signed application, the Department will review and process the application as set forth in § § 106.6—106.8 (relating to application submission and approval procedure; application evaluation criteria; and processing of applications) and issue an approval or denial of the application. Approved applicants will be required to execute a contract before funding is released.
(j) Default. A participant who fails to abide by the terms of the contract or the act or this subchapter shall be in default.
(k) Determination of fees. The participation fees for loans and loan guarantees may be set by the Department at rates not to exceed 2.5% of the total project amount requested.