State announces $225 million to aid small businesses impacted by COVID-19
Gov. Tom Wolf on Monday said the state will pump $225 million into small businesses that experienced devastating losses during the COVID-19 pandemic.
The money is federal funding made available to the state through the federal stimulus bill known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The state Department of Community and Economic Development will distribute the funds to 17 Community Development Financial Institutions statewide, which in turn will provide it to small businesses in the form of grants.
Businesses can use the money for operating expenses and technical assistance they may require to reopen, including training.
The funding includes $100 million for the Main Street Revitalization Program, which will target small businesses that experienced losses after the state in March ordered nonessential firms to close to reduce the spread of the coronavirus.
Another $100 million is being set aside specifically for minority-owned and disadvantaged businesses.
The remaining $25 million is loan deferral and loss reserve funding the CDFIs can use to offer their existing portfolio clients payment relief as they grapple with closures and reopenings.
Funds could be available to Community Development Financial Institutions by the end of the week, Mr. Wolf said at a press briefing to announce the program.
“The goal is to get it out to businesses that need it, that are the most vulnerable and suffered most during the pandemic,” he said. “We need to make sure florists, barbers and coffee shops … emerge with a viable path forward.”
State legislators partnered with the administration to determine how to allocate the funds.
According to a statement from the state Senate Democratic Caucus, eligible businesses must have been operating by Feb. 15 and have 25 or fewer employees to receive funds.
Those applying as disadvantaged firms must be 51% owned and managed by socially or economically distressed individuals.
Mr. Wolf said a goal is to get the money to businesses that did not receive federal funding through the Paycheck Protection Program, which was also part of the CARES Act.
“We’ll see if that actually happens,” he said.
Gordon Denlinger, state director of the National Federation of Independent Business, said, “We hope these grants are a lifeline that helps [businesses] survive.”
The NFIB has 13,000 members statewide.
“Many very small businesses that didn’t have previous bank relationships or were ineligible did miss out on the federal loan programs,” Mr. Denlinger said. “This may give those business owners an opportunity to access the capital they need to get back on their feet.”
The state in March made available more than $60 million in no-interest loans for small businesses, but that fund — the Working Capital Access Program — ran out of money within weeks.