Pennsylvania Department of Community & Economic Development Machinery & Equipment Loan Fund (MELF)
Objectives and General Information
The Machinery and Equipment Loan Fund (MELF) is designed to assist Pennsylvania businesses in modernizing and upgrading their plants through low interest, long term loans for machinery and equipment. The program is intended for businesses unable to fully finance their projects through equity, bank financing and other private and public sources. Loan proceeds may be used to acquire and install new equipment and machinery, upgrade existing equipment and machinery and/or evaluate equipment and machinery needs. Repair costs are not eligible. The maximum loan amount is $500,000, or 50% of the total eligible project cost, whichever is less. The loan recipient must generate one net new full time job or preserve one full time equivalent job for each $25,000.00 of loan proceeds within three years of disbursement of funds.
Eligible types of businesses include manufacturing, industrial, agricultural and mining. Service, mercantile, commercial or retail operations are not considered industrial and do not qualify. Due to the volume of applications received and limited MELF funding, the applicant is required to submit a Letter of Intent in order for the MELF staff to review for competitiveness and job projections.
Interest Rate and Term of Loan
The interest rate in Bucks County is currently 3.00%.
Failure to meet any of the terms and conditions of the loan will result in an increase in the interest rate to 2% above the current prime lending rate. Loans will have a repayment period of up to seven years or the life of the asset, whichever is less.
Fees charged by the Bucks County Economic Development Corporation include a non-refundable $1000.00 application fee. Additionally, the borrower is responsible for any BCEDC legal expenses associated with the loan. A 1% placement fee is payable upon signing the MELF commitment letter.