As a shutdown prompted by the COVID-19 (novel coronavirus) pandemic enters its second week–at least for some Pennsylvania businesses–state officials and lawmakers are starting to address the toll the order may take on the commonwealth’s economy.
Late last week, the Commonwealth Financing Authority (CFA) and the Pennsylvania Industrial Development Authority (PIDA) announced the creation of an emergency relief fund officials say will provide $61 million in assistance to the state’s businesses.
PIDA provides low-interest loans and lines of credit to eligible businesses that commit to creating and retaining full-time jobs and for the development of industrial parks and multi-tenant facilities. Loan applications are packaged and underwritten by a network of certified economic development organizations (CEDOs) that partner with PIDA to administer the program.
Under PIDA’s COVID-19 Working Capital Access Program (CWCA), for-profit small businesses with 100 or fewer employees worldwide could be eligible for working capital loans up to $100,000.
“Many companies will be applying for loans and the process is expected to be competitive, so I urge any Lehigh Valley companies interested in applying for these loans to do so as quickly as possible,” said state Sen. Lisa Boscola (D-18) Thursday, in a news bulletin about the program.
A detailed list of items required and forms that must be filled out as part of the application can be found on the Lehigh Valley Economic Development Corporation website, along with other details about the program.
Below are additional facts about eligibility and other details related to the loans. Any questions should be directed to msierra.serfass@
What You Need to Know:
- Eligible Businesses: For-profit businesses located in Lehigh and Northampton counties with 100 or fewer employees may qualify for disaster relief loans.
- Loan Amount: The maximum loan amount is $100,000.
- Eligible Costs: Eligible costs include operating costs incurred three months prior to the submission of the application. Retail/service enterprises are eligible for up to 50 percent of working capital costs incurred up to six months prior to submission of the application. Working capital are costs used for operations, excluding fixed assets and production machinery and equipment.
- Interest Rates: Interest rates are 0 percent for eligible businesses and 2 percent for agricultural producers.
- Amortization: 12 years
- Term: 3 years
- Repayment: No payment in the first year, with amortized payments monthly for the following 24 months, and one balloon payment due at the end of the third year.
- Guarantors: Each individual or other business entities owning 20 percent or more of applicant business must guarantee the loan.
- Collateral: The loan shall be secured by a blanket lien on all business assets currently owned or acquired in the future at the highest lien position available.
- Fees: $750 non-refundable application fee payable at the time of application, and 1.5 percent of the loan amount.
PIDA said it plans to begin processing low-interest loan applications in the next week.