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Philadelphia and New York City Launch COVID-19 Relief Grants and Loan Programs to Assist Small Businesses

Corporate and Securities Alert | March 25, 2020
By: Adam Chelminiak and Ryan J. Udell

In addition to aid available at the federal and state level, cities around the country have also taken measures to help their local small businesses deal with the impact of the COVID-19 pandemic. In particular, both Philadelphia and New York City recently announced programs that offer grants and zero-interest loans to be used for working capital, payroll, inventory or other qualified purposes.

Philadelphia COVID-19 Small Business Relief Fund

On March 23, 2020, the city of Philadelphia announced the creation of the COVID-19 Small Business Relief Fund (the Fund). The Fund will provide immediate relief to Philadelphia businesses affected by the pandemic in the form of grants and zero-interest loans. The program is jointly administered by the Philadelphia Commerce Department and the Philadelphia Industrial Development Corporation.

The program offers three tiers of relief:

  1. Microenterprise Grants. $5,000 grant per business for businesses with annual revenue under $500,000;
  2. Small Business Grants. Up to $25,000 grant per business for businesses with annual revenue between $500,000 and $3,000,000; and
  3. Small Business Zero-Interest Loan. A $25,000 to $100,000 zero-interest loan (with no collateral requirements) for businesses with annual revenue between $3,000,000 and $5,000,000.

Businesses can submit applications online here. Applications will be reviewed on a rolling basis.

The Commerce Department has estimated that applications will take approximately 7-10 days to process. Once a grant or loan is approved, funds will be electrically disbursed to the recipient.

The determination to award grants and loans will based on consideration of the following priorities:

  • The number of jobs that the business sustains during a normal, pre-COVID-19 level, business cycle;
  • The business demonstrates that it has lost 50% or more of revenue due to the COVID-19 pandemic;
  • The business demonstrates a strong chance of remaining open post-COVID-19;
  • The business has experienced loss of revenue from other situations in addition to COVID-19, such as recent public works projects (e. water main breaks, utility repairs, street closures, etc.);
  • The business provides jobs to low-income individuals and/or is located in a zip code with high poverty; and
  • The business has operated consistently for two years or more. 

Note, for sole proprietors/independent contractors, priority will be given to those who are located in zip codes with high poverty and/or those that sustain multiple sub-contractors during normal business, pre-COVID-19 levels.

New York Employee Retention Grant Program

New York City is offering small businesses with fewer than 5 employees “employee retention grants” to cover 40% of payroll, up to $27,000.

To be eligible, businesses must:

  • Be located within the five boroughs of New York City;
  • Demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue;
  • Employ 1-4 employees in total across all locations;
  • Have been in operation for at least six months; and
  • Have no outstanding tax liens or legal judgements.

Applications can be submitted online.

NYC Small Business Relief Programs Loan Fund

New York City small businesses with fewer than 100 employees who have experienced a decrease in revenue of at least 25% are eligible for zero-interest loans of up to $75,000 to help retain employees and ensure business continuity.

To be eligible, businesses must:

  • Be located within the five boroughs of New York City;
  • Demonstrate that the COVID-19 outbreak caused at least a 25% decrease in revenue;
  • Employ 99 employees or fewer in total across all locations;
  • Demonstrate ability to repay the loan; and
  • Have no outstanding tax liens or legal judgements.

As part of the application, businesses will be required to demonstrate a revenue decrease by providing documentation such as point-of-sales reports, bank statements, quarterly sales tax filings, prior-year tax returns or CPA-certified profit & loss statements. Once the necessary materials have been collected, businesses can complete a pre-application online.

White and Williams will continue to follow these and other small business relief programs and offer updates as developments arise. If you have any questions about how to apply for relief or other business continuation planning options, please contact Ryan J. Udell (udellr@whiteandwilliams.com; 215.864.7152), Adam Chelminiak (chelminiaka@whiteandwilliams.com; 215.864.7078) or another member of the Corporate and Securities Group.

As we continue to monitor the novel coronavirus (COVID-19), White and Williams lawyers are working collaboratively to stay current on developments and counsel clients through the various legal and business issues that may arise across a variety of sectors. Read all of the updates here.

This correspondence should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult a lawyer concerning your own situation and legal questions.
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