Local Government Capital Projects Loan Program (LGCPLP)

The Local Government Capital Project Loan Program (LGCPL) is a funding initiative administered by the Governor’s Center for Local Government Services within the Pennsylvania Department of Community and Economic Development (DCED). This state-level program was established to support small municipalities by offering low-interest loans specifically targeted toward capital improvement projects. The intent is to help local governments with populations of 12,000 or less finance the acquisition of essential equipment or the purchase, construction, renovation, or rehabilitation of municipal facilities. The program addresses a financial barrier that many smaller local governments face by making capital funds available at an interest rate of just 2% per annum. Eligible applicants include any municipality in Pennsylvania with a population of 12,000 or less. This includes boroughs, townships, and cities that fall under this population threshold. The funds may be used for acquiring rolling stock or data processing equipment, or for the construction or renovation of public buildings that house municipal operations. The maximum loan amount available for equipment purchases is 50% of the total cost, not exceeding $50,000, and for facilities, it is up to 50% of the total cost, capped at $100,000. A minimum loan request of $1,000 is required. Each municipality may only submit one application per state fiscal year. Applicants are required to submit their requests using the DCED’s Electronic Single Application for Assistance, available at www.esa.dced.state.pa.us. The application must include a detailed project description, budget and financing outline, municipal resolution of support, and documentation such as audit reports, proof of matching funds, and compliance certifications. Loan repayments commence within two months of loan agreement execution and are payable quarterly. Facility loans must be repaid within 15 years, while equipment loans must be repaid within the useful life of the equipment. A delinquency charge of 6% per annum is applicable for repayments made 30 or more days late. Applications are accepted on a rolling basis throughout the fiscal year, subject to the availability of funds. The DCED reserves the right to allocate 50% of program funds to equipment loans and 50% to facility loans, although these allocations may be rebalanced depending on demand. Evaluation criteria include the financial disadvantage of the municipality (as measured by the Department’s Early Warning System), the project's impact on health, safety, and welfare, and whether the project involves intergovernmental cooperation. Municipalities awarded facility loans are required to secure the loan with a recorded mortgage and provide mortgage title insurance. Construction or renovation projects must commence within six months of loan execution. For equipment loans, municipalities must deliver a note and security agreement. Insurance coverage and compliance with prevailing wage laws may be required. The program ensures that all funded projects align with state and local laws, and disbursements are made at specific project milestones. For further information, interested applicants may contact the Governor’s Center for Local Government Services at the DCED, located at 400 North Street, 4th Floor, Commonwealth Keystone Building, Harrisburg, PA 17120-0225. Phone inquiries can be directed to 888-223-6837, or emailed to ra-dcedclgs@pa.gov. The program does not list a specific close date due to its rolling application nature, but prospective applicants are encouraged to apply early in the fiscal year to ensure fund availability.

Applicants must use DCED’s Electronic Single Application system and include all supporting documentation, including signed signature pages and resolutions.