About LIDA

The Lancaster Industrial Development Authority (LIDA) is an organization dedicated to assisting in the financing of economic development in Lancaster County, Pennsylvania. LIDA’s activities are under the authority of the Pennsylvania Department of Community and Economic Development (DCED). LIDA meets the third Wednesday of each month at 4 p.m. in Commission Room, City Hall Annex Building, 120 North Duke Street, Lancaster, Pa.

What we do

Since incorporation in 1972, LIDA has played a key role in assisting with the financing of construction and equipping of manufacturing and commercial buildings. We also have played an important role in the expansion of many existing businesses and nonprofit 501(c)(3) organizations.

LIDA serves as a conduit between a lender and an organization involved in construction or expansion. No government money is involved in the loans processed through LIDA. By preparing proper documentation, the loan from a lender or from bondholders is made directly to LIDA, which in turn loans funds to the organization being assisted. Since the bonds or loans to LIDA are municipal authority debt, the interest paid is tax free to the lender or bondholder.

The Internal Revenue Code includes provisions to encourage economic development by providing for authorities such as LIDA to provide such loans at lower interest rates because the interest earned by the lender or bondholder is not subject to federal income tax.

Who may qualify for tax-free financing

Nonprofit 501(c)(3) organizations can qualify for tax-free financing.  In addition, manufacturing firms may qualify but there are restrictions such as limitations on the total amount of tax-free financing the firm has undertaken, a prohibition against financing used equipment, a limitation on the amount of funds that can be used for land, and a requirement that the payback period on the loan cannot exceed 120% of the depreciable life of the financed assets. These are several of the principal limitations, and there are others.

Any manufacturing firm desiring to expand or construct new facilities can inquire of LIDA concerning the qualification of a specific project. Each project must qualify under the Internal Revenue Code and the Pennsylvania Economic Development Financing Law.