Investments
Guidelines and Forms of Investments
As a link between public and private organizations, the Strategic Investment Fund (SIF) helps projects meet collective goals and objectives and to respond to a wide variety of stakeholder needs and interests. It offers creative financing terms and seeks to share in the returns when projects are successful.
Investment by SIF may take the form of mortgages, participating mortgages, loan guarantees, letters of credit, revenue participation certificates, equity investments or a combination. SIF does not seek management control over the projects in which it invests.
Geographic Focus: All SIF investments are to be made in projects that are in the southwestern Pennsylvania region, which includes the following 12 counties: Allegheny, Armstrong, Beaver, Butler, Fayette, Greene, Indiana, Lawrence, Mercer, Somerset, Washington and Westmoreland.
Risk Tolerance: SIF is willing to accept higher risk than what had been the case in recent years, with potentially longer return horizons and lower expected returns, but in a manner consistent with its governing instruments, including that projects must present a reasonable expectation of return of capital.
Allowable project types include but are not limited to:
- Commercial and industrial real estate within the 12-county region
- Office to residential conversion
- Multifamily residential
- New technology development
- Business attraction, retention, expansion, and creation
- Brownfield redevelopment
- Mixed-use
- Tenant fit-out
- Strategic site acquisition
- Speculative building and site development
- Financing of intermediaries
Eligible uses of funds include but are not limited to:
- Acquisition of real property (land and structures)
- Bridge financing for grant sources
- Land development/infrastructure
- Rehabilitation and/or new construction
- Soft costs
- FF&E
- Working capital
Terms of Loan of Investment
- Minimum: $500,000
- Maximum: $8,000,000
- Borrowers may be required to have invested equity in the form of cash or other assets of at least 10% of the Total Project Cost.
- Senior Debt
- Subordinate Debt
- Bridge Debt
- Equity Investment
- Length of term
- Strength of Borrower and/or Guarantor
- Collateral and collateral position
- Repayment terms
- Community impact
- Facility type
Term
Loan Terms
- Minimum loan term 12 months
- Maximum loan term 10 years
- Maximum interest only/draw period of 36 months. Actual interest only/draw period will be determined based on construction and lease-up timelines.
- An equity interest should be held for a period of no fewer than five years and no more than 10 years.
- 1% of the aggregate approved amount of $2,000,000 or more.
- 1.5% of the aggregate approved amount between $1,000,000 and $1,999,999.
- 2% of the aggregate approved amount up to $999,999.
The fund manager of the Strategic Investment Fund, Regional Industrial Development Corporation (RIDC), identifies projects, performs underwriting, recommends investments to the SIF Board and provides oversight of investments. If you’re interested in a SIF loan, fill out this Intake Form.
