Financial relief available to Pennsylvania employers

by | Mar 27, 2020 | Articles, Business and Corporate Law, COVID-19

The below information is current as of the publication date listed. Because COVID-19 response measures on all fronts are continually evolving, clients should stay alert to new developments and consult with counsel on any critical questions.

In addition to the potential relief available under the Coronavirus Aid, Relief and Economic Security (CARES) Act, Pennsylvania businesses may have two other potential avenues for relief.

SBA Economic Injury Disaster Loans

A disaster declaration by the U.S. Small Business Administration (SBA) has made low-interest loans available to eligible small businesses. SBA’s Economic Injury Disaster Loans will offer up to $2 million in loans to help overcome temporary loss of revenue. These loans may be used to pay fixed debts, payroll, accounts payable, and other bills related to the impact of the COVID-19 virus. More information from the SBA can be found here and below is the latest information available:

  • The determination as to whether you operate a “small business” is determined by the SBA via a formula based on NAICS code found here
  • The interest rate is 3.75% for small businesses without credit available elsewhere, businesses with credit available elsewhere are not eligible
  • The interest rate for nonprofits is 2.75%
  • Loans are offered with long-term repayments up to a maximum of 30 years
  • Terms are determined on a case-by-case basis, based on each borrower’s ability to repay
  • Estimates are that the loan process takes a few weeks
  • Businesses can also contact the SBA’s Customer Service Center at 1-800-659-2955 or by emailing disastercustomerservice@sba.gov
  • Applicants may apply online using the Electronic Loan Application (ELA) via the SBA’s secure website here

COVID-19 Working Capital Access Program (CWCA)

For Pennsylvania employers, new funding is available to help small businesses impacted by COVID-19, through a new program under the Pennsylvania Industrial Development Authority’s (PIDA) Small Business First Fund, the COVID-19 Working Capital Access Program (CWCA). PIDA authorized making $60 million available to provide loans of up to $100,000. Funds are expected to become available this week.

  • Available to for-profit businesses with 100 or fewer full-time employees
  • Loan terms are three years with a 12-year amortization
  • No payments will be due and payable during the first year
  • Principal and if applicable, interest payments will be due monthly for years two and three
  • A balloon payment will be due and payable at the end of the third year
  • The interest rate for the program is 0% except for agricultural producers in which case the interest rate is 2% fixed for the life of the loan
  • Further information can be found here and the application can be found here

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