More Small Business Relief Now Available in the Commonwealth of Pennsylvania
More small business relief has arrived! On Monday, June 8, 2020, Governor Wolf announced additional relief for small businesses in Pennsylvania. The relief funding consists of $225 million of the $4 billion provided to the Commonwealth through the CARES Act. In addition, the Lancaster County Small Business Recovery and Sustainability Fund is also launching grants to local businesses.
The state relief from Governor Wolf will not consist of loans; instead, the fund will consist of grants to applicants. However, the Pennsylvania Department of Community and Economic Development (the “PA DCED”) will not administer it. Instead, a series of non-profit lenders known as community development financial institutions (the “CDFI”), such as Community First Fund, will be handling the funds.
The Governor announced in a press conference on Monday that the goal of the program is to help small businesses that have not been helped from earlier efforts, including the Paycheck Protection Program. There will be a common application created for the CDFIs to use, and it should be ready by the end of June.
The state will divide the relief into three programs:
Historically Disadvantaged Business Revitalization Program
This program offers $100 million for small businesses:
- that have experienced a loss as a result of the order to close all non-life sustaining businesses
- that have or will incur additional costs in order to adapt to new business operations due to COVID-19, and
- where socially and economically disadvantaged individuals own at least fifty-one percent (51%) of the company and control management and daily operations.
Main Street Business Revitalization Program
The next program offers $100 million for small businesses that realized a loss as a result of the order to close all non-life sustaining businesses and have or will incur additional costs in order to adapt business operations due to COVID-19.
Loan Payment Deferment and Loss Reserve Program
The final program will provide $25 million to the CDFI, which will allow the CDFI’s to offer forbearance and payment relief to existing borrowers of the CDFI. The intention is that these funds are for borrowers of the CDFI who are struggling due to COVID but also to provide support to the CDFI’s who are experiencing increased borrower defaults.
Grants will be capped at $50,000 per applicant. The Governor has not yet announced the priority of awards but has stated that they will not be on a first-come, first-serve basis. To qualify, businesses must have less than 25 employees and less than $1 million in annual sales plus have been in operation as of February 15, 2020. All applicants must submit a recent tax return.
Recipients should use the grant funds to cover operating expenses during the shutdown and to transition a small business for re-opening. They may also use grant funds for technical assistance, such as training and guidance for business owners.
In addition to the CDFI’s management of these new state programs, Lancaster County launched a new website for local businesses to apply for free personal protective equipment (“PPE”). Businesses must have less than 100 employees to apply.
Lancaster County also received $25 million of federal aid, which the Lancaster County Small Business Recovery and Sustainability Fund (the “Fund”) will administer as grants to local businesses.
Phase I of the Fund will provide $10 million to small Lancaster County businesses who have a demonstrated need for working capital or retrofit. To qualify, the business must have 20 or fewer employees.
The application for this phase will go live on Monday, June 15, 2020 at 7 a.m. The grants provided will not be on a first-come, first-serve basis.
The Fund has not yet finalized details for Phase II, but there should be an additional $10 million aimed at small businesses with 100 or less employees.
To find out more information regarding the Lancaster County Small Business Recovery and Sustainability Fund, click .
To read other news about more small business relief during COVID, click here for my blog post on recent updates to the Paycheck Protection Program.