Subordinate Term Loan

Financing for experienced developers of commercial and industrial projects to fill a hole in the capital stack for a specific project.

The Subordinate Term Loan, also known as Flexible Real Estate Debt, provides financing to experienced developers of commercial and industrial projects of all sizes throughout all neighborhoods of Philadelphia. PIDC seeks to fill funding gaps in projects that will create jobs for low-and-moderate-income people, spur investment in underserved areas, and/or improve building energy efficiency.


  • Property Acquisition   
  • Construction / Building Renovation
  • Machinery and Equipment
  • Soft Costs – legal, accounting, engineering, architectural fees, permits, appraisals and other related expenditures


Loan Amount Range from $500,000 to $5,000,000. One full time equivalent job must be created for every $35,000 lent. PIDC can fund between 10% to 40% of total project costs with a 10% minimum equity contribution.
Interest Rate: to be determined based on project location, credit criteria, and market conditions.
Loan Term Up to 15 to 20 years (will generally seek to match senior lender term).
Underwriting Combination of credit, cash flow, collateral, financial position, management capacity and industry risk.


Clients should schedule a preliminary meeting with PIDC to review project eligibility. Completed loan applications will be scheduled for review and consideration by the PIDC Loan Committee, PIDC Board of Directors and the City Director of Commerce. Projects are also typically subject to an environmental and historical review process. Following loan approval, PIDC issues a commitment letter to the client. Settlement may occur once the terms of the commitment are satisfied.


Application $1,500 (loans up to $5 million and non-profit organizations) - $2,500 (loans greater than $5 million) nonrefundable fee, payable at time of application submission
Commitment 1.5% of the Loan Amount, payable upon acceptance of PIDC’s commitment letter
Closing Legal and closing costs. Fees are subject to change. Please confirm all transaction fees with PIDC prior to application.