Many Pennsylvania small businesses affected by the COVID-19 pandemic will be able to apply for no-interest loans up to $100,000, according to details of a financial assistance fund unveiled by the state on Wednesday.
The COVID-19 Working Capital Access Program will be available to for-profit businesses with 100 or fewer full-time employees. Thousands of establishments and services across Pennsylvania have had to temporarily close or will see a sharp decrease in revenue because of the pandemic and statewide shutdowns of non-essential businesses.
‘My top priority is to save Pennsylvania lives, then save their livelihoods,’ Gov. Tom Wolf said in a news release. ‘I am utilizing every resource available to assist Pennsylvania’s business during this incredibly difficult time, and this small business funding availability is a step in the right direction. It will help provide a little peace of mind to hundreds of small business owners and their employees.’
Earlier this week the Commonwealth Financing Authority authorized the transfer of $40 million to Pennsylvania Industrial Development Authority’s Small Business First Fund. Combined with existing funds, the special COVID-19 relief fund will provide more than $60 million in assistance.
According to the Department of Community and Economic Development, the interest rate for the program is 0%, except for agricultural producers, for which the interest rate is 2% fixed for the life of the loan.
Loan terms are three years with a 12-year amortization. No payments will be due for the first year, while principal, and if applicable interest, payments will be due monthly for years two and three. A balloon payment will be due and payable at the end of the third year. A balloon payment will be due and payable at the end of the third year.
The funds can be used for working capital, ‘which for purposes of this program is considered capital used by a small business for operations, excluding fixed assets and production machinery and equipment.’
Loan applications will be packaged by Certified Economic Development Organization for each businesses’ area, which will also help determine eligibility and discuss with business owners the details of the process. A list of CEDOs by county is here.
Businesses seeking guidance from DCED can also contact its customer service resource account at ra-dcedcs@pa.gov.
State Senate Majority Leader Jake Corman, R-Benner Township, said earlier this week that the turnaround time for loan approval could be ‘a matter of days.’
