Montco Opportunity Loan Program

Montco Opportunity Loan Program Guidelines and Application

The Montco Opportunity Loan Program is designed as a “one stop shopping” tool for businesses seeking capital and labor in Montgomery County. Through this new financing program, sponsored by the County and the Commonwealth of Pennsylvania, we are able to offer opportunities to help small and medium sized business grow their employee base and maximize the value of their investments in land and capital equipment.

By linking the interest rate of the loan to the company’s participation in other county economic development efforts, such as skills training and our PA CareerLink® employment services, the program is able to offer unique incentives and cost-saving benefits to businesses.

Our employment services group is able to support the business community’s needs by offering free recruitment services to any Montgomery County company looking to hire new employees. This builds on existing programs in the County by connecting our PA CareerLink® services to the business community, reinforcing our outreach to businesses with a dedicated team focusing solely on tailoring our capabilities to job recruitment needs.

General Requirements

Any applicant company must be a duly formed and subsisting corporation, partnership, limited liability company, sole proprietorship, not for profit or governmental agency that has its principal offices in Montgomery County. Preferences will be given to companies or organizations that have been located in the County and have been in operation for a minimum of two years. For profit and non-profit entities are both eligible so long as they otherwise meet the criteria for the loan.

The applicant company must show, in conjunction with the loan, a substantial reinvestment in the company operations, such as the contribution of additional equity by the principal owners, or the purchase of new equipment and/or development of new technology through the deployment of research and development funding generated from operations. The applicant must also commit to remain located within Montgomery County for the duration of the loan. Exiting Montgomery County will result in all interest and principal balances becoming due and payable within six (6) months, along with a repayment of all credits issued under the interest rate abatement program.

The company must also demonstrate the capacity for growth, as evidenced by (i) in the case of an established business, increased demand for its product or service, and (ii) in the case of a new or startup business, strongly supported projections, a well-reasoned business plan and such other supporting documentation as is necessary or appropriate under the circumstances.

The applicant must provide a specific plan to expand operations during the term of the loan, and must be prepared to invest its own equity into the business in conjunction with the loan. Although the program does not require a specific ratio of equity investment to requested loan amount, the County will consider the financial stability of the company, the personal assets and wherewithal of the principal owners of the company, the historical performance of the company and the amount of liquidity, in the form of cash and cash equivalents, available to the company and the principal owners as part of the underwriting process.
Capital provided under this loan program can be used for capital investment, land acquisition, equipment purchases, raw materials and inventory.

Loans may also be made available for working capital, but only in circumstances where the demonstrated opportunity for growth requires expanding the pool of available employees and loan proceeds are used to increase employment. Applicants for loans must demonstrate sufficient available capital to pay wages and fringe benefits for existing as well as new employees for at least twelve (12) months after the loan closing.

Funding Available

The County intends to provide at least Seven Hundred Fifty Thousand ($750,000) in loans during 2014, and can provide individual loans of up to Two Hundred and Fifty Thousand Dollars ($250,000) under this program. The availability (or unavailability) of funding under this loan program will not preclude the applicant from applying for other available funding from the County and its affiliated agencies if it would otherwise eligible. Applicants may only receive one loan through this program per year.

Rates and Costs
The standard interest rate for this loan program will be set at Prime Rate at the time of closing plus 350 basis points. The loan applicant can apply for the abatement of a portion or all of the interest charged under the loan. Compliance with any one of the conditions listed below will reduce the interest rate:

Employment Programs. Employment of at least one (1) individual presently unemployed and registered with the Montgomery County workforce system through PA CareerLink per fifty thousand dollars ($50,000) borrowed, with employment of twelve (12) consecutive months for each individual;

Additional Financing. Successful additional financing achieved by the Company, in the form of additional institutional debt equal to or greater than the original principal balance of the loan.

Participation in Blight Abatement Programs. Occupancy, rehabilitation or acquisition of a blighted property (so designated by the applicable Township and/or County) during the term of the loan;

Participation in Redevelopment and Infrastructure Programs. Contributions to landscaping, road improvements or any publicly accessible land in accordance with an Improvement District of similar Township and/or County initiative of greater than twenty five thousand dollars ($25,000) completed in conjunction with the loan;

Doing Business with the County. Successful issuance of an award of greater than fifty thousand dollars ($50,000) to the company by the County for a service solicited by the County through its Request for Proposal Process and consistent with the County’s stated procurement policies;

All of the above terms have a cumulative impact on the interest rate and will be weighted in the following manner:

• Employment: Reduction of 75 basis points for each employee added, up to a maximum of 300 basis points.

• Additional Financing: Reduction of 150 basis points.

• Participation in Blight Abatement or Redevelopment and Infrastructure Programs: Reduction of 100 basis points.

• Doing Business with the County: Reduction of 50 basis points.

The loan applicant may apply for and receive abatements for one or all of the above conditions. For instance, if the full Employment condition is met, the loan would be priced at Prime + 50 basis points. If the applicant achieves both the Employment and Additional Financing conditions, the loan would be priced at Prime -100 bps. If all conditions are met, the loan would be priced at Prime – 350 basis points, with the stipulation that the rate cannot be less than .75%.
Companies that have received loans from the County will have the opportunity to receive a credit worth $500 on the principal balance of their loan for each company they refer and is selected for financing through the program.

Final determination of the interest rate will be based on the applicant’s willingness to commit to the parameters described above and the applicant’s ability to describe specific plans to meet the program goals. A successful loan applicant will be charged the standard interest rate (Prime + 350 basis points) during the life of the loan, but interest charges will be rebated at the end of each year of the loan based on the company’s performance against those conditions. At the end of each year, in order to receive the interest rebate, it is the responsibility of the borrower to provide documentation satisfactory to the County as to which of the rate reduction criteria have been met.

In the case of a default, all abatements will be considered null and void, and all interest due will be computed based on the original rate.

Amortization Terms
For capital investments and real estate purchase, the applicant can request a term of up to ten (10) years. For working capital, raw materials and inventory, the applicant can request a term of up to five (5) years. All loans offer a first year of interest only at the stated interest rate, and fully amortize starting in the second year.
Principal Forgiveness

The County or the Authority responsible for issuing the loan may choose, at its sole discretion, to forgive some or all of the principal balance of the loan at any time, thereby converting the Loan into a Grant. This is only applicable to some non-profit entities and government agencies, and must be stipulated between the applicant and the Montgomery County Development Corporation (MCDC). Principal forgiveness shall not be available to any loan recipient that defaults on the Loan while the Loan is in force.

Security and Guarantees
Loans will be made available only to companies and organizations with satisfactory personal and corporate credit history, as evidenced by independently obtained credit reports. All applicants must submit to credit checks and other due diligence as described in the loan application documents.

Loans made to corporate entities must be personally guaranteed by any owners with greater than twenty percent (20%) ownership of the entity. For those companies where there is no one individual or organization with greater than twenty percent interest, the County will look to multiple guarantors based on financial information presented. Owners of the company must evidence sufficient collateral to substantially repay the loan should the company be unable to repay.
Loans made to a not for profit organization or governmental agency should be guaranteed by the Directors and/or Managers of the organization.

The County can provide the loan on a stand-alone basis, with a first lien on Corporate and personal assets, or provide gap financing in conjunction with other debt or equity financing. In these circumstances, the County would look to take a second position lien on Corporate and personal assets, but would only participate in such an arrangement if the guarantors demonstrated superior creditworthiness and sufficient assets to reasonably guarantee repayment.

If the applicant is seeking additional financing through the County and anticipates introducing a banking or financial institution as a primary lender under the proposed transaction, the Applicant is required to submit the proposed intercreditor agreement from the financial institution in conjunction with the application.

Application Process
The single Loan Application allows the applicant to apply for various programs using one form while capturing specific program information needed to evaluate the project for possible funding. The application is designed to help applicants comprehend the program requirements up front and expedite the review process.

Applications must be submitted through the County’s Procurement website, where an open solicitation is posted. Applicants must complete all parts of the application that are relevant and applicable to their business. Applications may be submitted at any time during the course of the year.

Following submission of the application, the applicant will be contacted by the County on the progress of their application. Applicants will be required to meet with staff to discuss the completeness of the application and the proposed plan; if an applicant has not submitted the needed information, or cannot demonstrate the wherewithal to repay the loan, the application may be rejected.

Should an application be rejected, the applicant may resubmit during a subsequent review period. Staff can also work with applicants to direct them toward other loan programs or business assistance opportunities that could assist in developing a more complete proposal.

The Montgomery County Development Corporation (MCDC) will review applications six times per year. Review for submissions received from January 1 to February 28 will begin on March 1, 2014. Subsequent periods of review will begin on May 1, 2014, July 1, 2014, September 1, 2014 and November 1, 2014. The County is committed to providing an affirmative commitment or cause for rejection of the application no later than sixty (60) days after the initiation of a review period.

Fees and Costs
The Borrower will be required to pay the following fees to the Authority:

1. Application Processing Fee: A non-refundable $500 fee due at the time of submission of the application; and

2. Closing Fee: One percent (1%) of the value of the loan, due at the time of the loan closing.
In addition to the above fees, the Borrower shall pay all unanticipated out-of-pocket expenses of the Authority relating to the loan, including the fees and expenses of the Authority’s legal and other professional costs.


The Parties agree that the information, documents and instruments delivered to the County, including, without limitation, any application materials and all agreements and documents referenced herein or executed and delivered by the parties at Closing, are of a confidential and proprietary nature (“Confidential Information”), with the exception of the “Non-Confidential Executive Summary.” Except as otherwise required under any legal requirements, the County will maintain the confidentiality of all Confidential Information delivered to it by the other Party or its agents in connection with the negotiation of a loan unless (i) compelled to disclose by judicial, administrative or canonical process (including, without limitation, in connection with obtaining governmental and regulatory approvals necessary to consummate the transactions contemplated hereby) or by other requirements of law, or (ii) disclosed in an action or proceeding brought by a Party hereto in pursuit of its rights or in the exercise of its remedies hereunder.


1 - Register with Public Purchase:
Use the link below to begin the registration process and select the “Free Registration” option. It can take up to 24 hours to activate your account. You will receive an email from letting you know when your account has been activated.

2 - Register with Montgomery County:
Once you have received your activation email from Public Purchase, log into and accept the terms and conditions of use. Then link below to start your registration process with the County. .,pa.

If you need further assistance with this process please contact Public Purchase directly at

3 - Application Documents:
Loan Program Introduction Document

Montgomery County Loan Application Checklist

Montgomery County Loan Application