Section 395.4 - Incubator grants, loans and loan guarantees(a) Application.--A local sponsor may submit an application to the board to obtain a grant, loan or loan guarantee to establish an incubator. Each application shall:(1) Demonstrate that: (i) a facility exists that can be transformed into an incubator at a specified cost; or(ii) in the case of new and expansion construction, appropriate existing facilities are not available within the geographic area and an incubator facility will be constructed or expanded at a specified cost.(2) Demonstrate the ability to directly provide or arrange for the provision of business development services for tenants of the incubator. These services shall include, but not be limited to, financial consulting assistance, management and marketing assistance and physical services.(3) Demonstrate a potential for sustained use of the incubator facility by eligible tenants, through a market study or other means.(4) Demonstrate the ability to manage and operate the incubator facility in accordance with section 5. (5) Include other information as the board may require through guidelines.(b) Review of application.--The board shall review and accept applications based on the following criteria:(1) Ability of the local sponsor to carry out the provisions of section 5.(2) Economic impact of the incubator on the community.(3) Conformance with areawide and local economic development plans if such exist.(4) Location of the incubator, in order to encourage geographic distribution of incubators across the State.(5) Such other criteria as may be established by the board through guidelines.(c) Grant and loan conditions.--(1) Grants and loans awarded or guaranteed shall be used only for the acquisition and leasing of land and buildings, the construction, rehabilitation and expansion of buildings or other facilities and the purchase of equipment and furnishings, which are necessary for the creation and operation of the incubator.(2) Grants, loans and loan guarantees may not exceed 50% of total eligible project costs, or $650,000, whichever is less. The maximum grant amount awarded in any project may not exceed $240,000. Grants shall be provided only to projects located in municipalities designated as distressed under the act of July 2, 1984 (P.L. 520, No. 105) , known as the Business Infrastructure Development Act. (3) Funds loaned shall be secured by lien positions on collateral at the highest level of priority which can accommodate the borrower's ability to raise sufficient debt and equity capital. When the obligation of a local sponsor is guaranteed, the financial institution holding the obligation shall be required to adequately secure the obligation.(4) Grants, loans and loan guarantees for an incubator in which the facility is currently leased shall only be made if the applicant intends to buy the facility. These loans shall be secured by a leasehold mortgage.(5) Payment of interest and principal on loans may be deferred at the discretion of the board.(6) Interest on all loans shall be determined by the secretary and published as a notice in the Pennsylvania Bulletin and shall not be required to be equal throughout this Commonwealth.(7) Funds may be lent for a maximum of ten years or the useful life of the property, as established by the United States Department of Treasury, whichever is greater.1984, July 2, P.L. 555, No. 111, §4, imd. effective. Amended 1986 , July 9, P.L. 1193, No. 101, § 1, retroactive effective 4/1/1986; 1987 , July 9, P.L. 233, No. 41, § 1, retroactive effective 6/30/1987.