5 area counties receive grants, access to loans
Delaware Valley Regional Economic Development Fund provides help to meet coronavirus challenge-
A development fund has committed $3.25million to help businesses alleviate the impact of the pandemic.
PHILADELPHIA » The Delaware Valley Regional Economic Development Fund (DVREDF) has committed $3.25 million to the five counties in the Greater Philadelphia region to help businesses alleviate some of the impact of the COVID-19 pandemic. A nonprofit organization — the Delaware Valley Regional Economic Development Fund provides financing for projects that promote economic development in Bucks, Chester, Delaware, Montgomery and Philadelphia counties.
The organization has supported the region with $1.25 million in economic grants to the five counties — with each receiving $250,000. In addition, the economic development fund has introduced a back-to-business loan program, making another $2 million available to support a wide range of businesses and needs.
“When COVID came we reached out to the commerce departments and economic development funds to see how could we fill a void,” John Coffman, executive director of Delaware Valley Regional Economic Development Fund said in a Tuesday interview. “For us it was about being a partner to the region and help small business owners as much as we could.”
In Montgomery County, the funds were used in May to help support the second round of the MontcoStrong Small Business Grant Program. On May 29, the county announced that a total of $4,999,500 in grants was awarded to 437 Montgomery County businesses impacted by the coronavirus. The award totals ranged from $9,000 to $20,000.
Tom Ellis, president and chairman of Delaware Valley
Regional Economic Development Fund said his organization has been strategizing since the onset of the coronavirus on how best to free up the grant money “in ways that most benefit the region’s small businesses, with the least amount of red tape.”
“We knew we needed a quick-fire response to help some of the most vulnerable businesses, communities and individuals right now,” Ellis said in a press release. “We also knew we didn’t want to create new programs or just turn over money in an unlimited fashion, so we’re working hard with our county partners to ensure we are able to meet the most urgent needs and do it as quickly as possible.”
In addition to the Montgomery County Commerce Department, Coffman said the agency worked with the Chester County Economic Development Council, Delco Strong in Delaware County, Bucks County officials and the PHL COVID-19 Fund in Philadelphia.
Back-to-business loans
The Delaware Valley Regional Economic Development Fund is also partnering with the five counties to offer $2 million in immediate capital to help businesses get moving again.
Each county will have access to $400,000 in loans to provide back-to-business loans to small businesses, with the potential for the funds to be matched.
The loan program is the result of conversations about what happens when businesses reopen, according to Coffman, who said the Delaware Valley Regional Economic Development Fund determined that a back-to-business loan program offered the potential for the greatest impact.
“We agreed everyone was focused on helping businesses today, but what happens when they go to open and maybe their rent was covered but they owe insurance — can we create a program that works,” he explained.
Details about the loan program are still being developed, according to Coffman, including the size of the businesses that can apply. However, he said the goal is to have loans available by early July to support businesses as they reopen. By then, he said, all the county grant program should be complete.
“Our hope is at the end we will have metrics on who couldn’t get money and who could use it. We want to see what businesses are getting left out,” he said.
The loans will have a five-year maturity and will accrue interest in the first two years. If paid off before the third year, no interest will be due. Annual payments on the loan will begin in the third year, and the loan will have an interest rate of 3 percent. Years three and four will be interest only, while year five will be interest and principal payments.
Coffman added that there will likely be “holes” in the lending and borrowing system, which is why his organization is taking “a regional role in providing nontraditional capital.”
“Our mission is to look at the current lending environment and try to fill those holes, rather than duplicating other efforts. We are confident that this unique loan program will make an important difference and help to support the sustainability and growth of businesses that are the lifeblood of our communities,” he said.
Details on partnerships and how to apply for loans will be shared as they are finalized. Information about applying for the loans will be available on the Delaware Valley Regional Economic Development Fund website. For more information, visit dvredf.org/.