As discussed in a previous post, the State and Federal governments have established new loan programs that may offer a source of much needed funding for small businesses struggling from the fallout of the COVID-19 pandemic. There have been several updates on this funding:
Pennsylvania Industrial Development Authority (“PIDA”)
The applications for working capital loans through PIDA have far surpassed the funding available for this $60 million program. In York County, applications for over $4.5 million of funds were submitted to the Commonwealth’s Department of Community and Economic Development (“DCED”). York County was in the top 5 counties in the Commonwealth for applications submitted. While this shows how robust the business landscape is in York County, given the number of applications submitted across the Commonwealth, additional funds are not currently available through this loan program, and DCED is no longer accepting applications. Businesses who were unable to obtain funding through PIDA are being encouraged to apply for SBA loans.
U.S. Small Business Administration (“SBA”)
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law on Friday, March 27, 2020 and provides for two types of SBA funding: the Paycheck Protection Program (“PPP”) and Economic Injury Disaster Loans (“EIDL”). Both loans offer small businesses with much needed funds with favorable terms. The EIDL can give small businesses $10,000 in emergency grant funding within three days of applying for a loan up to $2 million. The application for this loan can be found here. The PPP can give businesses up to a $10 million nonrecourse loan with the ability to forgive a portion of it. This loan is not yet available to the public, but the application process is expected to open on Friday, April 3, 2020. Business owners can apply through any lender that is approved for SBA’s 7(a) loan program. More information on the PPP can be found here.
A quick reference guide comparing the two programs can be found here:
Reference Guide revised April 3, 2020
As always, the Business Group at Stock and Leader can help business owners navigate funding sources along with any other legal needs. Contact a member of Stock and Leader’s Business Law team today.