Harrisburg, PA − March 18, 2020 − Leaders from each of the four caucuses of the General Assembly and the Governor agreed to move $40 million under the Commonwealth Financing Authority to a small business loan program to aid businesses impacted by the COVID 19 outbreak. These funds will be combined with $21 million in other available funds for a total of $61 million.
Small businesses are among the most affected by the closure of non-essential businesses, and in the financial recovery which will follow this outbreak, they will need as much support as the state and federal government is able to provide.
“In the wake of the unprecedented Coronavirus pandemic, it’s important that state government is trying to respond to all manner of its impacts, and that includes providing support to our small business community,” said Senate Democratic Leader Jay Costa, Jr. “Today, the CFA took necessary and swift action to provide low interest loans to small businesses to help keep them afloat during these difficult times. I commend the leadership of Governor Wolf and the other caucuses of the General Assembly for working together so quickly to come up with a viable plan to provide this assistance.”
“There’s been major disruption to small businesses and their employees,” said House Democratic Leader Frank Dermody. “This is a bipartisan down payment to get some working capital out quickly. Much more help is needed and we’ll keep working on that.”
These funds will be used to fund working capital loans of up to $100,000 directly to small businesses (those that employ 100 or fewer persons). The PIDA board has the authority to move money from MELF to SBF for such purposes. The interest rate is currently 3 percent; however, The Pennsylvania Industrial Development Authority (PIDA) board has the authority to adjust the interest rates.
The SBF is the most logical program to assist small businesses quickly because this is already its intended purpose. It has the structure along with the needed regional infrastructure to help small businesses immediately including partnerships with local a Certified Economic Development Organization (CEDO) in preparing and submitting an application for approval by the Authority. As these loans have a maximum amount of $100,000, they can all be approved by the staff and thus, if all requirements are met, and a complete application is submitted, each loan can be turned around rather quickly.