Penn Security's Commercial Finance Department will suit the needs of your business regardless of size and scope.

You should name Penn Security Bank and Trust Company your bank of choice when deciding on a long term commercial banking relationship. We are small enough to give the personal service which is the backbone of community banks, yet large enough to meed the requirements of most all but the largest domestic and international corporate businesses. Our technology equals or exceeds most banks, large and small, and since we write most of our software internally, we can customize our systems for customers when necessary to increase our customer's efficiency and reduce both our and our customers costs thereby.

We have a broad range of commercial lending products tailored to the needs of the small and medium sized business including those guaranteed by federal agencies. We lend on a secured and unsecured basis and depending on the circumstances in financial markets, at fixed or variable rates. A list of a number of these lending products follows.

We also provide for cash management, ACH services for payrolls, EDI services, trust relationships, including acting as trustee for qualified retirement plans and estate planning services for the small family business or the corporate executive.

Commercial Mortgage Loans
We lend money for acquisition, new construction, additions to existing facilities and refinancing of commercial real estate. Generally, terms of these financing do not exceed twenty years in length, no more than 80% of appraised values in amount, at a variable rate indexed to our bank's base rate (national prime rate) plus a margin or at a rate fixed for a period of several years and then reset based again on an index or a rate that is re-negotiated at the end of a fixed period.

These mortgage loans require that a mortgage (deed of trust in some jurisdictions) be placed against the real estate, that title to the property being mortgaged is insured by an acceptable title insurance company as a first lien, that the property be insured against fire and natural disasters, that there be no environmental problems (we may require an environmental audit) and that taxes be escrowed.
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Commercial Equipment Loans
We lend money for acquisition and refinancing of commercial equipment. Generally, terms of these financing are limited by the expected life of the equipment as well as the anticipated depreciated value of the equipment at any certain point. Depending on the types of equipment, we loan 50% to 80% of the value. Financing statements are filed in the Department of State and Prothonotary's office for the filing of liens and also, if the equipment is to be attached to real estate, in the Office of the Recorder of Deeds in the county in which the real estate is located. We require a certification that after a records search that we will have a first lien position. Rates can be fixed or variable depending on circumstances in the financial market and length of the loan term.

Commercial Lines of Credit
A line of credit is our commitment to loaned funds to a given (or calculated) maximum amount until the date that the commitment (usually one year) expires. There may be restrictions on the purpose for which the line may be used, such as for working capital purposes. Credit lines are generally reviewed annually and ordinarily will be renewed provided the financial condition of the borrower is still good.

Lines of credit may be secured or unsecured. We required unsecured lines to be reduced to zero at least once a year, but secured lines may continue through the year without reducing them to zero.

A line of credit may be set up with a note providing a maximum draw and when fully drawn require execution of a new obligation before funds may be drawn again or may be set up as a revolving note where redrawing funds after repayment does not require a new note and the process can be repeated any number of times. See the information on this website about cash management regarding automatic extensions and pay backs of lines of credit linked to checking and active asset accounts in the bank. This feature allows you to minimize interest costs paid on your lines of credit and maximize interest payments to you for your excess funds.

Credit lines for working capital purposes are generally limited to 50% of receivables and 50% to 70% of inventory, depending on the type. Penn Security also has a cash flow maximizer product which provides for a purchase of the receivables on a discounted basis (with recourse) thus freeing up more funds to the customer. For more information see that title on this website.

Commercial Letters of Credit
A commercial letter of credit is a document in letter form in which we, at your request, agree to reimburse a third party (called the beneficiary) upon their compliance with the terms and conditions of the letter.

Letters of credit have been used in international trade for thousands of years. Today they have many other uses which all relate to protecting the beneficiary from certain risks. Examples may be letters of credit to assure that roads will be paved in new developments and assuring that contingencies in sales of businesses will be met, etc. These letter types are referred to as standby letters of credit - if the requester does not meet his obligation, the beneficiary can look to the bank for satisfaction.

Fees for issuance of letters of credit generally run 1% to 2%. The requester is usually required to sign a note which is disbursed when the letter is drawn upon and we may require collateral/security for its issuance.

Government Guaranteed Loans
From time to time it is advantageous to the borrower to obtain government guarantees for a loan either because the borrower's financial condition does not warrant making the loan without one, or because the guarantee will result in a lower rate or payment. We have worked with a number of the government guarantee agencies such as the United States Farm Service Agency and the United States Small Business Administration. We can help you through the procedures to enable you to qualify for such guarantees.

Establishing A Commercial Loan Relationship
Generally, each commercial loan differs from others because the circumstances of each business differ so widely. Generally, for more complex commercial loans, much documentation is required. You will be asked to provide financial information including income statements, balance sheets, changes in capital and changes in cash position statements, as well as income tax returns. Appraisals, environmental audits, flood certifications, inventory valuation, receivable listings, etc. may be required. For larger loans, we may require full CPA audited or CPA reviewed or complied statements.

Even if you have no plans for immediate borrowing, it is a good idea to have us become familiar with you and your business. We can make suggestions which could be very helpful to you in arranging for future financing and make your business more efficient in the present.

We think there are no banks better than us at what we do. We invite you to establish your banking relationship with us today!


Click here to learn more about our Cash Management Services which include Active Investment Accounts, Automated Payroll Services, ACH Services or Lock Box Services.
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