Bethlehem (March 18, 2020) – Senator Lisa Boscola (D-Lehigh/Northampton) announced today that the Commonwealth is creating an emergency response fund to aid Pennsylvania small businesses impacted by COVID-19. Specifically, the Small Business First Fund, administered by the PA Industrial Development Authority (PIDA), will initially have $61 million available for business assistance.
“Small businesses are the heart of our economy and the impact that necessary closures to flatten the curve of COVID-19 will have on them requires our state government to act quickly to ensure their survival,” Boscola said. “By using the Small Business First Fund, we are providing a state program to provide some necessary aid to our small business owners,” Boscola added.
Earlier today, the Commonwealth Financing Authority (CFA) acted to transfer $40 million to PIDA for use under the Small Business First Program. PIDA additionally has $21 million to add to the program for a total of $61 million.
“PIDA hopes to be able to accept applications by as early as next week,” Boscola said.
Funds through this emergency response fund will be used for working capital loans of up to $100,000 directly to small businesses and hopefully nonprofits (those that employ 100 or fewer persons). The interest rate is currently 3%, however the PIDA board has the authority to adjust the interest rates and so it is possible the board will act to lower rates to as low as 0%.
The Small Business First Fund has the structure along with the needed regional infrastructure to help small businesses immediately including partnerships with a local Certified Economic Development Organization (CEDO) in preparing and submitting applications for approval by PIDA. Loans can be approved by PIDA staff and thus, if all requirements are met, and a complete application is submitted, each loan can be turned around rather quickly without Board approval.
PIDA provides low-interest loans and lines of credit for eligible businesses that commit to creating and retaining full-time jobs and for the development of industrial parks and multi-tenant facilities. Loan applications are packaged and underwritten by a network of certified economic development organizations (CEDOs) that partner with PIDA to administer the program.
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