Any loan governed by Pennsylvania law, will now include a Business Purpose Affidavit in your document package that must be signed and notarized by the borrower at closing.
- Pennsylvania caps interest rates at 6% for loans of $50,000 or less, unless:
- The loan is unsecured and over $35,000, or
- The loan qualifies as a business loan (requires a signed affidavit).
- The affidavit ensures compliance and protects lenders when setting interest rates.
- You’ll receive this affidavit automatically, regardless of loan amount, so you don’t have to worry about missing this requirement.
Pennsylvania Business Purpose of Loan Certification for InvestorDocs orders is now in Affidavit form and it will also be included in Pennsylvania ApartmentDocs, CommercialDocs, ConstructionDocs, and C&IDocs orders.
GoDocs currently includes a Business Purpose of Loan Certification (“Certification”) in all InvestorDocs packages to confirm that loan proceeds will be used solely for business purposes. Inclusion of this Certification is not tied to governing law or property location.To further strengthen our document offerings, and with customer-centricity in mind, GoDocs is implementing a new enhancement for loans governed by Pennsylvania law.
In Pennsylvania, loans of $50,000 or less are capped at a 6% annual interest rate unless (i) the loan is an unsecured, non-collateralized loan over $35,000, or (ii) the loan qualifies as a “business loan.” (See 41 P.S. § 201.) A loan is a “business loan” if the funds are to be used in a business enterprise and where the borrower exercises control over the managerial decisions of the enterprise in which the funds are to be used; provided, however, the borrower must sign an affidavit under penalty of perjury confirming the funds are for a business use (“Affidavit”). (See 10 Pa. Code § 7.2.)
Although our customers’ orders always document business-purpose (commercial) loans, and are ordinarily greater $50,000, they must still be vigilant to not run afoul of Pennsylvania’s 6% interest rate limitation for loans of $50,000 or less. That is just one more burden our customers face when ensuring their Pennsylvania business purpose loans comply with the law. Given this, GoDocs will now automatically include the Affidavit in all Pennsylvania loan packages, regardless of loan amount. For InvestorDocs orders, customers will receive the Affidavit in lieu of the Certification. As a result, customers will not only be protected from the consequences of entering an impermissible interest rate into our system in connection with a loan of $50,000 or less, but they also will receive a standardized Affidavit regardless of the order’s loan amount which will provide all interested third parties with notice that the loan is a business purpose loan.
Accordingly, every InvestorDocs, ApartmentDocs, CommercialDocs, ConstructionDocs, and C&IDocs package for Pennsylvania-governed loans will include an Affidavit to be executed (and notarized) by each borrower at closing. This ensures full compliance with Pennsylvania law and protects lenders when setting interest rates.This enhancement will be released into production on 11/19/2025 and will apply to all Pennsylvania loans going forward. Customers must ensure that the borrower executes and notarizes the Affidavit as part of the loan closing process.