Pennsylvania Incentives and Workforce Development Guide
For a list of Pennsylvania economic development agencies that can help with the site selection process, visit our Online Site Seekers’ Guide.
Pennsylvania offers several forms of financial and business assistance including loans, training, tax credits and technical assistance through a variety of incentives programs. Visit www.newPA.com/business for more program details.
Ben Franklin Technology Development Authority (BFTDA):
- BFTDA Venture Investment Program: Investment in venture capital partnerships investing in early-stage PA technology companies. Venture capital partnerships and angel investment groups are eligible. Funding is variable.
- BFTDA Technology Development Grant: Grants to help groups or consortia of Pennsylvania companies position themselves at the cutting-edge of emerging technologies and establish a competitive advantage through the use of advanced e-business systems. Not-for-profit organizations and community groups are eligible. Funding is variable.
- BFTDA Alternative Energy Development Program (AEDP): Provides funds to businesses through the four Ben Franklin Technology Partners for access to capital, business expertise and technology commercialization services to advance the development of new technologies and the generation, conservation and transportation of alternative and clean energy. The BFTDA Centers receive funding to award to entrepreneurs, startup & early-stage companies, established companies, investors, higher education & research and BFTP alumni companies.
Discovered In PA-Developed In PA: Grant program to build capacity to better support Pennsylvania businesses and to spur creativity and innovation in the provision of economic development services. Eligible applicants are private and public sector entities whose mission includes economic development. Competitive projects include ongoing or innovative new activities, programs or events to promote entrepreneurship, encourage technology transfer, improve capacity building for regional economic development or provide outreach to businesses.
PA First Program: Funding was increased in FY 2013-14 to $37.8 million. PA First is a grant and loan funding tool to facilitate increased investment and job creation within the commonwealth. Eligible applicants include businesses, or IDCs, municipalities or authorities on behalf of businesses, which create or preserve a significant number of jobs, make a large investment and offer substantial economic impact. Funds can be used for machinery/equipment, job training, infrastructure, land and building improvements, environmental assessment/remediation, acquisition of land, buildings and right-of-ways, working capital and site preparation.
Business In Our Sites Grants & Loans: A $300 million statewide loan pool, created by the issuance of bonds. This money will be made available to communities statewide to help them develop shovel-ready sites to accommodate expanding businesses, thus building the local and regional economy and ultimately creating jobs. Emphasis will be given to communities that lack the resources necessary to invest in site preparation. Funds may be used to acquire land, conduct environmental assessment and remediation and perform demolition. The funds may also be used for site preparation activities and installation of infrastructure, including but not limited to: sewer, water, storm water, utilities and telecommunications, both onsite and as needed to bring service to the site. They may also be used for access roads or other necessary on-site and off-site transportation improvements. These include rail, costs associated with engineering, legal and professional services; and other activities necessary to make a specific site ready for reuse.
Building PA: Provides $150 million in funding for the development of real estate assets within the commonwealth to be matched by private investors looking to facilitate projects within the commonwealth. This public/private partnership has resulted in a $300 million fund that will provide mezzanine capital for developers seeking to redevelop and revitalize real estate assets.
The Commonwealth’s business financing tools have been consolidated into the Pennsylvania Industrial Development Authority (PIDA) as a result of Act 161 of 2014. This creates a one-stop shop for business financing. Small businesses can access low-interest loan financing for land and building acquisition and construction, machinery and equipment purchases and working capital. Loans are available up to $400,000 or 50% of total eligible project costs, whichever is less; maximum loan amount for working capital is $100,000 or 50% of total eligible project costs, whichever is less. Financing for exporting activities are now also available under PIDA. The maximum loan amount is $350,000. For-profit businesses with no more than 250 full-time employees exporting products manufactured or assembled at facilities located in PA or for services that originate from facilities located in PA are eligible.
Alternative & Clean Energy Program: Administered jointly by the Dept. of Community and Economic Development (DCED) and the Dept. of Environmental Protection (DEP), under the direction of the Commonwealth Financing Authority (CFA), it provides financial assistance in the form of grant and loan funds that will be used by eligible applicants for the utilization, development and construction of alternative and clean energy projects in the commonwealth.
- Loans for manufacturers of alternative and/or clean energy generation equipment or components shall not exceed $40,000 for every new job created within three years after approval of the loan. Loans for any alternative energy production or clean energy project shall not exceed $5 million or 50% of the total project cost, whichever is less.
- Grants for manufacturers of alternative and/or clean energy generation equipment or components shall not exceed $10,000 for every job projected to be created by the business within three years after approval of the grant. Grants for any alternative energy production or clean energy project shall not exceed $2 million or 30% of the total project cost, whichever is less.
Business Opportunities Fund (BOF): Installment loans, lines of credit and technical assistance for minority business enterprises, women-owned business enterprises and small businesses. There are no minimum or maximum loan sizes and funds may be used for cash flow (working capital), equipment, leasehold improvements and acquisition of owner-occupied real estate.
Community Economic Development Loan Program: Low-interest loans for projects in distressed communities. Loans are available up to $100,000 or 50% of total eligible project cost (whichever is less), and can be used for land and building acquisition; building, construction and renovation; machinery and equipment acquisition and installation and working capital. For-profit small businesses (100 employees or less) that are located in a DCED-designated distressed community or Keystone Opportunity Zone are eligible.
First Industries Fund (FIF): Administered by the Commonwealth Financing Authority (CFA) and the Dept. of Community and Economic Development, FIF is a loan and loan guarantee program aimed at strengthening PA’s agriculture and tourism industries. Uses include: land and building acquisition and construction, machinery and equipment purchase and upgrades and working capital.
High Performance Building Program: Provides financial assistance in the form of grants and loan funds to underwrite the cost premiums associated with the design and construction or major renovation of high performance buildings in the commonwealth. Loans for high-performance building projects for small businesses shall not exceed $2 million or 50% of total project cost, whichever is less. Grants for high performance building projects shall not exceed $500,000 or 10% of the total eligible building construction/renovation costs (whichever is less).
Marketing to Attract Tourists: Provides funding to support and develop heritage assets, enhance outdoor recreation and support the growth or development of various events. A primary goal of the program is to promote overnight stays. Applicants should, as part of the project narrative, explain how their project will meet this goal. Nonprofit organizations with a significant interest in the development of tourism product that provides a visitor experience to a tourist region, destination and/or attractions are eligible to apply. Funds may be used to support events, facility enhancements, new construction and/or renovations or for the development of marketing, advertising and public relations campaigns to build attendance.
Pennsylvania Capital Access Program (PennCAP): PennCAP is a loan guarantee program that provides banks with a flexible and non-bureaucratic tool to make business loans that are somewhat riskier than conventional bank loans in a manner consistent with safe and sound bank regulations. PennCAP’s loan guarantee program operates on a portfolio basis rather than a guarantee on loans made. The maximum guarantee is $500,000.
Pennsylvania Community Development Bank (PCD Bank): The PCD Bank’s purpose is to assist and expand Community Development Financial Institutions (CDFIs). CDFIs make loans and investments and perform other community development functions in distressed communities and for disadvantaged borrowers. CDFIs have demonstrated an ability to lend prudently and productively in unconventional markets often overlooked by conventional financial institutions. PCD Bank offers a Loan Program to assist and grow CDFIs.
Second Stage Loan Guarantee Program (Second Stage): Second Stage is a loan guaranty program that offers guarantees for bank loans to second stage manufacturers and advanced technology and life sciences businesses to support growth in these vital sectors. The loan guarantees are primarily for working capital, but are also available to finance the asset needs of life sciences, advanced technology or manufacturing businesses that have been in existence for at least two, but no more than seven, years at the time of application. The maximum guarantee is $1,000,000.
Innovate in PA: Innovate in PA is a new initiative of the Commonwealth of Pennsylvania and is a catalyst for economic growth. The Department of Community & Economic Development will sell $100MM of premium insurance tax credits to qualified purchasers through a third-party broker. The sale of these tax credits will result in new revenues to the Department’s Ben Franklin Technology Development Authority which will then deploy the funds to various economic development programs including the award winning Ben Franklin Technology Partners and the Pennsylvania Life Sciences Greenhouses. This new source of capital will seek to address the capital needs of Pennsylvania’s high tech companies and will help to advance their competitiveness in the global economy.
Job Creation Tax Credits (JCTC): A $1,000-per-job tax credit to approved businesses that agree to create at least 25 new jobs (or expand the existing workforce by at least 20%) within three years; 25% of the tax credits allocated each year must go to businesses with less than 100 employees. Tax credits may not be utilized by a business until the jobs are actually created. The tax credit amount was increased from $1,000 to $2,500 per job for employers who create a new job that is filled by an unemployed individual.
Keystone Opportunity Zones (KOZ): Provide certain state and local tax abatements to businesses and residents locating in designated zones. Eligibility for benefits is based upon annual certification. In order to receive benefits, any entity applying must be compliant with all local and state taxes and building and zoning codes. The KOZ program was amended to create new zones, expand existing zones and continue promoting job creation through targeted tax reductions, credits, and exemptions.
PA Resource Manufacturing Tax Credit (PRM): Beginning in 2017, any manufacturer purchasing natural gas containing ethane as a petrochemical feedstock at a facility within the commonwealth could be eligible for a PRM Tax Credit equal to five cents per gallon ($2.10 per barrel) of ethane purchased and used in manufacturing ethylene, so long as the company makes a capital investment of at least $1 billion and creates the equivalent of at least 2,500 full-time jobs while constructing the facility. Effective for ethane purchased between Jan. 1, 2017 and Dec. 31, 2042.
Research and Development Tax Credit: Allows companies holding qualifying Research and Development Tax Credits to apply for approval to sell those tax credits and assign them to the buyer(s). The annual cap was increased to $55 million of tax credits available annually and removed the 2015 sunset provision of the program.
Educational Improvement Tax Credit Program (EITC): Tax credits to eligible businesses contributing to a Scholarship Organization, an Educational Improvement Organization and/or a Pre-Kindergarten Scholarship Organization. Tax credits equal to 75% of its contribution up to a maximum of $750,000 per taxable year — can be increased to 90% of the contribution, if the business agrees to provide same amount for two consecutive tax years. The annual cap has been increased to $100 million in tax credits available annually.
Keystone Innovation Zone Tax Credit Program: Provides tax credits to for-profit companies less than eight years old operating within specific targeted industries within the boundaries of a Keystone Innovation Zone (KIZ) Program. Tax credits must be applied against the tax liability of a KIZ company for the tax year in which the KIZ Tax Credit was issued. A KIZ company may claim a tax credit equal to 50% of the increase in that KIZ Company’s gross revenues in the immediately preceding taxable year attributable to activities in the KIZ, over the KIZ company’s gross revenues in the second preceding taxable year attributable to its activities in the KIZ. The KIZ Tax Credit is limited to $100,000 annually per KIZ company. Applications must be submitted on or before Sept. 15 of each year.
Pennsylvania Economic Development Financing (PEDFA):
- PEDFA Tax Exempt Bond Program: Tax-exempt and taxable bonds, both in pooled transactions and stand-alone transactions, to be used to finance land, building, equipment, working capital and refinancing. Loans are no less than $400,000 and no more than $10 million for manufacturers (with no upper limit for other projects) — up to 100% of project costs. Eligible businesses include manufacturing, nonprofit 501(c) (3), energy, solid waste disposal, wastewater treatment, transportation facilities and assisted living/housing.
- PEDFA Taxable Bond Program: Tax-exempt and taxable bonds, both in pooled transactions and stand-alone transactions, to be used to finance land, building, equipment, working capital and refinancing. Loans no less than $400,000; up to 100% of project costs.
Film Tax Credit Program: $60 million in tax credits is available in an effort to expand the activity of film, television and other production companies in the state. A project is eligible if at least 60% of the project’s total production budget is used for Qualified Pennsylvania production expenses. The amount of tax credits available is equal to 25% of Qualified Pennsylvania production expenses for the project.
Neighborhood Assistance/Enterprise Zone Tax Credit (NAP/EZP): Provides tax credits to private companies investing in rehabilitating, expanding or improving buildings or land located within designated enterprise zones. Uses include real property improvements such as rehab, expansion or physical improvements to buildings or land resulting in jobs created or retained. Tax credits equal 25% of amount invested, up to $500,000 total tax credits per project.
Tax Increment Financing Guarantee Program (TIF): The TIF was designed to promote and stimulate the general economic welfare of various commonwealth regions and communities, and to assist in the development, redevelopment and revitalization of Brownfield and Greenfield sites in accordance with the TIF Act. The program is part of an effort by DCED to provide credit enhancement for TIF projects to improve market access and lower capital costs through the use of guarantees of up to $5,000,000 to issuers of bonds or other indebtedness.
Job Gateway: launched in July 2012 to keep up with the increasingly mobile and technologically advanced society. This initiative revolutionizes the way job seekers find family-sustaining employment and employers find the skilled candidates that they need — all at no cost to the job seeker or employer.
Keystone Works: A job training program focused on matching newly unemployed individuals to high priority occupations. Unemployment Compensation benefits continue to be paid during the up to eight week training period. Monetary incentives are available to businesses hiring trainees of $375 every four weeks employed up to $1,500 total (16 weeks).
Guaranteed Free Training Program (GFT-WEDnetPA): WEDnetPA Program: Essential Skills (up to $450 per trainee and $75,000 per company) and Advanced Technology training (up to $850 per trainee and $50,000 per company) for eligible employees of new and expanding businesses. Trainees must be PA residents, employed in PA, permanent full time employees and earn at least 150% of current federal minimum wage. Essential Skills: must be front-line employee or first level supervisor. Advanced Technology: high tech skills directly related to the employee’s scope of work. See at www.wednetpa.com.
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