[vc_row][vc_column][vc_column_text]July 5, 2017
At today’s meeting approved a limited time interest rate incentive to encourage businesses to make investments and grow jobs in the Commonwealth. Outlined below are the details of the incentive along with the PIDA interest rate policy moving forward:
For any PIDA loan application that is received on or before December 31, 2017, a 2% interest rate fixed for the full term of the loan will be awarded to the PIDA borrower. Beginning on January 1, 2018 or in the event that prior to December 31, 2017, PIDA issues $60,000,000 in loan approvals from the traditional PIDA Fund, $30,000,000 in loan approvals from the MELF Fund, or $15,000,000 in loan approvals from the SBF Fund, the interest rate policy for the respective fund where the threshold has been met will automatically be changed to the interest-rate policy as follows:
Beginning on January 1, 2018 (unless a threshold as described above has been met earlier), interest rates will be set quarterly on January 1, April 1, July 1, and October 1 of each year using the current 10-year U.S. Treasury rate as an index benchmark, as set forth below:
- REAL ESTATE LOANS. The borrowers will have 4 options:
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- For term loans with a regular amortization, a fixed interest rate for the full term of the loan, set at the 10-year U.S. Treasury rate, rounded to the closest quarter point, plus 100 basis points.
- For term loans with a regular amortization, a fixed interest rate for the first seven (7) years of the loan term, set at the 10-year U.S. Treasury rate, rounded to the closest quarter point. After the initial 7-year period, the rate will automatically reset to the then-current 10-year U.S. Treasury rate, rounded to the closest quarter point. The reset rate is limited to a 200 basis point increase/decrease.
- For 10-year term loans with a 20-year amortization period, a fixed interest rate for the full term of the loan, set at the 10-year U.S. Treasury rate, rounded to the closest quarter point, plus 100 basis points.
- For 10-year term loans with a 20-year amortization period, a fixed interest rate for the first five (5) years of the loan term, set at the 10-year U.S. Treasury rate, rounded to the closest quarter point. After the initial 5-year period, the rate will automatically reset to the then-current 10-year U.S. Treasury rate, rounded to the closest quarter point. The reset rate is limited to a 200 basis point increase/decrease.
Source: Arch Capital VA – We Buy Houses Richmond.
- EQUIPMENT LOANS. A fixed interest rate for the full term of the loan, set at the 10-year U.S. Treasury rate, rounded to the closest quarter point, plus 100 basis points.
- WORKING CAPITAL AND ACCOUNTS RECEIVABLE LINES OF CREDIT. A fixed interest rate for the 12-month term of the credit line, set at the 10-year U.S. Treasury rate, rounded to the closest quarter point, plus 100 basis points.
- POLLUTION PREVENTION ASSISTANCE AND ENERGY EFFICIENCY LOANS. A fixed interest rate of 2.00% for the full term of the loan.
Please note that previously, the fixed rate option was based on the 10-year U.S. Treasury rate, plus 150 basis points and the variable rate option was based on the 10-year U.S. Treasury rate, plus 50 basis points.[/vc_column_text][/vc_column][/vc_row]
