Under the terms of the arrangement, PNC Bank will make up to $100 million in low-interest loans, floating at prime (currently 4.5%), minus 2.5%, or fixed at the five-year US Treasury rate, which is currently 3.5%. The EDA will provide up to a 50% guarantee of any single loan for qualified projects.
"Small- and mid-sized businesses play an important role in the economy, and it's vital for them to have access to capital to continue to develop in this difficult and competitive marketplace," says Jeff Schmidt, manager and SVP of business banking for PNC. "These businesses create new ideas that lead to better products and services."
Loans of up to $2 million will be made on the basis of EDA and PNC underwriting criteria, according to EDA CEO Caren S. Franzini. Businesses must also submit projects that commit to creating one job for every $50,000 borrowed. Manufacturers must simply commit to maintaining jobs. Preference will also be given to targeted industries and geographies, although the specifics have not been released.
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