Pennsylvania Allocates $225 Million for Small Businesses Impacted by COVID-19
Governor Tom Wolf recently announced that Pennsylvania will earmark $225 million for grant programs to support small businesses impacted by COVID-19. The program, which will be managed by the Pennsylvania Department of Community and Economic Development (DCED), will be available through Community Development Financial Institutions (CDFI). CDFIs are 17 Pennsylvania-based community development financial institutions that primarily provide financing options for small businesses. The programs are being funded from appropriations that Pennsylvania is receiving under the Federal COVID-19 stimulus known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The $225 million will be allocated to support the following three programs:
- $100 million for the Main Street Business Revitalization Program for small businesses (those with 25 or fewer employees) that experienced loss as a result of the governor’s March 19, 2020 order relating to the closure of all non-life-sustaining businesses and have or will incur costs to adapt to new business operations related to COVID-19 (PA Closure Order).
- $100 million for the Historically Disadvantaged Business Revitalization Program for small businesses (those with 25 or fewer employees) that experienced loss as a result of the PA Closure Order have or will incur costs to adapt to new business operations related to COVID-19, and in which socially and economically disadvantaged individuals own at least a 51 percent interest and also control management and daily business operations.
- $25 million will support the Loan Payment Deferment and Loss Reserve Program, which will allow CDFIs the opportunity to offer forbearance and payment relief for existing portfolio businesses that are struggling due to the impact of COVID-19, as well as stabliziling the financial position of the CDFIs that are experiencing significant increased defaults in their existing loan portfolios.
Grant awards under the programs may not exceed $50,000. While not yet finalized, the minimum amount for the grant awards is expected to be $5,000. The grant program guidelines recognize that exceptions to the 25 employee requirement and $50,000 maximum may be made in extraordinary circumstances.
Small businesses interested in applying for the grants must apply through an eligible CDFI (for loan relief, the small business would apply through the CDFI with which it has a loan) and meet the program requirements which, at a minimum, include:
- the business was in operation on February 15, 2020 and if required paid income taxes to the state and federal government, as reported on individual or business tax returns;
- COVID-19 has had an adverse economic impact and makes this grant request necessary to support the ongoing operations of the applicant;
- the grant will be used to cover COVID-19 related costs; and
- during the period beginning on June 1, 2020 and ending on December 31, 2020, the applicant has not and will not receive another grant under this program.
The business must have been. and remain, in compliance with all relevant laws, orders and regulations during the period of the COVID-19 disaster emergency under the PA Closure Order. Any noncompliant business will be ineligible for funding under the program and may be required to return all, or a portion, of the funds awarded.
If you are interested in more information about these grants, please contact Ryan Udell (email@example.com; 215.864.7152), Gwenn Barney (firstname.lastname@example.org; 215.864.7063) or another member of our Corporate and Securities Group.
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