Pennsylvania Minority Business Development Authority (PMBDA) Loan

About this programme

The Pennsylvania Minority Business Development Authority (PMBDA) Loan program makes low-interest loans to for-profit businesses owned or controlled by socially or economically disadvantaged Pennsylvania residents, to stimulate the creation, retention and expansion of minority-owned businesses and create jobs in the state. The Pennsylvania Department of Community & Economic Development (DCED) runs it, with loans overseen by a PMBDA Board of Directors.

The program exists for minority business enterprises unable to fully finance land, building, machinery, equipment, or working capital projects through equity, bank financing, or other private and public sources. Eligible disadvantage can arise from cultural, racial, chronic economic circumstances or background, or similar cause; named groups include African Americans, Hispanic Americans, Asian Americans, Native Americans, Eskimos, and Aleuts.

As of this guide, DCED states the program is not accepting new applications because of limited funds.

How it works

PMBDA finances up to 90% of eligible project costs or $250,000, whichever is less, at a fixed 2% interest rate set at loan approval and held for the life of the loan. The remaining at least 10% must come from another lending or equity source, and any matching lender with a superior lien position must offer terms at least as long as PMBDA's.

Repayment runs up to 15 years for land and buildings (the loan can be amortized over 20 years with a balloon at year 15), up to 10 years for machinery and equipment, and up to 3 years for working capital; projects mixing uses can blend these terms.

Eligible costs cover land (acquisition, site prep, utilities, landscaping, legal fees), buildings (acquisition, construction, rehabilitation, engineering, architectural and legal costs, with new construction allowed to lease up to 49% of space to other PMBDA-eligible tenants), machinery and equipment (acquisition, delivery, installation, including previously used equipment new to the applicant), and working capital (including personnel and training costs). Unrealized appreciation in land or building value, and broker/finder/financing-consultant fees, are not eligible costs.

The program carries a job requirement: a project can borrow $50,000 for every permanent full-time job created (or the part-time equivalent of at least 35 hours a week combined) and $35,000 for every job preserved, with both countable toward the loan amount. Jobs must be created or preserved within 3 years of the first loan disbursement; if a project misses its job projections within that window for reasons within its control, PMBDA's Board may reset the loan's interest rate to as much as double the original rate.

All loans must be secured at the highest available lien position on assets such as land, buildings, machinery, equipment, accounts receivable, or inventory, and PMBDA may also require personal or corporate guarantees.

A business that relocates within Pennsylvania must increase net employment by at least 25%, unless the move stays within the same county or the same U.S. Department of Labor-defined labor market.

Who can apply

The applicant must be a for-profit business enterprise (other than non-franchised restaurants, or a bar, tavern, or other business principally set up to dispense alcohol) owned or controlled by one or more socially or economically disadvantaged Pennsylvania residents.

Ownership structure requirements vary by entity type: a sole proprietor must be at least 18 and maintain full control; in a partnership, at least 51% of partners must be disadvantaged Pennsylvania residents holding a majority interest and control; in a corporation, its officers and at least 51% of voting stock owners must be disadvantaged Pennsylvania residents.

The applicant and its principals (anyone owning 20% or more) cannot be delinquent or in default on any existing private or public obligation, unless under a compliant workout agreement, and must be current on federal, state and local taxes (or under a compliant workout agreement).

Applicants and principals must disclose any conflicts of interest with DCED officials, employees, or PMBDA Board members.

Loans cannot fund refinancing (except short-term bridge financing disclosed in advance), speculation in property, payments to the business's own principals or owners beyond ordinary compensation, related-party transactions, or projects the applicant has already started or committed to without PMBDA's prior 'non-prejudicial approval.'

How to apply

1. Submit the DCED Single Application for Assistance electronically at the DCED Electronic Single Application site, then print and mail one full copy, with the Signature Page and required supplemental information, to the PMBDA office, referencing the application's Web ID number.
2. Include a signed IRS Form W-9, a narrative describing the business plus its marketing and operational plans, signed personal financial statements for each principal (20%+ owner), and resumes of principals and management.
3. Include the last 3 years of personal (for a new business) or business income tax returns (federal and state), three years of accountant-prepared fiscal year-end financial statements plus one-year projections (three-year projections for start-ups), and a commitment letter from every other lending or financing source involved.
4. For land or building purchases, include the executed sales agreement and a property appraisal no more than six months old if that asset will secure the loan; disclose any prior PMBDA loan to the business or an affiliate, and propose the security offered for the new loan.
5. Contact the DCED Customer Service Center at 866.466.3972 with questions before applying.

Documents you’ll typically need

• DCED Single Application for Assistance (with Signature Page)
• Signed IRS Form W-9
• Business, marketing and operational plan narrative
• Signed personal financial statements for each principal
• Resumes of principals and management
• 3 years of personal and/or business tax returns
• 3 years of accountant-prepared financial statements plus projections
• Commitment letters from other lending/financing sources
• Executed sales agreement (for land/building purchases)
• Property appraisal, no more than 6 months old (if real estate secures the loan)
• PMBDA Program Guidelines and Fact Sheet

Frequently asked

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Reviewed 2026-09-25. Programmes change, so check eligibility, amounts and deadlines on the official page before you apply. CapEasy is a private firm and is not part of any government body.