HARRISBURG — Pennsylvania is offering $35 million in state-guaranteed federal loans to help regional department store chain Boscov's exit bankruptcy, Gov. Ed Rendell said Thursday.

The loans would be financed through a U.S. Department of Housing and Urban Development program, although Boscov's still needs to secure some private loans before it can get the money.

Reading-based Boscov's filed for Chapter 11 protection in August and announced that it would close 10 of its 49 stores. In Pennsylvania, it operates 24 stores and employs more than 5,000 people.

One of the stores that remains open is in Clearview Mall in Center Township.

"We took this step because of the extraordinary reach that Boscov's has in Pennsylvania," Rendell said during a news conference.

Company officials did not immediately return a telephone call seeking comment Thursday.

Under the federal loan program, local governments can guarantee loans for economic development projects with federal community development block grants.

Any Boscov's real estate and inventory that is free of liens would serve as collateral for the loans, and the administration believes the value of those assets is sufficient to cover any remaining debt if the chain should default, Rendell said.

But even in a worst-case scenario, the loans carry a low risk because the state has a $24 million surplus in unspent grant money, Rendell said. The state receives anywhere from $9 million to $13 million annually in community development block grants.