Governor Tom Wolf announced last week a $225 million statewide grant program to assist small businesses that experienced losses as a result of the mandatory business closures due to the coronavirus pandemic.
Pennsylvania received $2.6 billion in federal stimulus funds through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, of which $225 million was earmarked for relief for small businesses. Gov. Wolf said, “This new program will provide direct support to impacted businesses to cover operating expenses during the shutdown and the transition to reopening.” Grants are expected to be $5,000 to $50,000 per business.
The funds will be distributed by the Department of Community and Economic Development (“DCED”) to the Community Development Financial Institutions (“CDFIs”), which will then administer the funding in the form of grants.
Funds for the grants will be made available through three programs:
· $100 million for the Main Street Business Revitalization Program for small businesses that lost money due to the governor’s March 19 order that closed most firms or had to spend to alter their operations.
· $100 million for the Historically Disadvantaged Business Revitalization Program for small businesses owned by “socially and economically disadvantaged individuals.”
· $25 million for the Loan Payment Deferment and Loss Reserve Program, to allow the community-development lenders to give businesses hit hard by the virus more time or money to pay debts. Some money would go to help the community lenders themselves to cover loan losses.
Details on eligibility requirements are scarce. Applicants for the Main Street Business Revitalization Program generally must have less than 25 employees and experienced losses as a result of the Governor’s March 19, 2020 order relating to the closure of all non-essential businesses or will incur costs to adapt to new business operations related to COVID-19. Applicants must also certify that the business was in operation on February 15, 2020 and has paid all required federal, state and local income taxes.
Applicants for the Historically Disadvantaged Business Revitalization Program must meet those same requirements. In addition, socially and economically disadvantaged individuals must own at least a 51% interest and also control management and daily business operations and meet the definition of “targeted population” as defined by 12 CFR 1805.201(b)(3)(iii).
Applications will be reviewed by the 17-member Pennsylvania CDFI Network, which is a community development financial institution certified by the US Department of Treasury that primarily provides business loans to low-to-moderate income individuals and business owners. CDFI hopes to have an application website available by the end of June. The window for applications is only expected to last for 2 weeks.
Businesses interested in obtaining a grant should contact a local CDFI for more information on the application process. A list of CDFIs in your area can be found at https://ofn.org/cdfi-locator. Please contact us with any questions or for assistance in compiling financial information needed for the application.