What funds are available to keep Centre County small businesses afloat during COVID-19 closures?
State and federal funds aim to provide small business owners with financial assistance amid the coronavirus pandemic, but Centre County business owners should act quickly, commissioner Mark Higgins said Tuesday.
If fired or laid off, employees can receive unemployment benefits, but entrepreneurs are not normally eligible to receive the same benefits. During Tuesday’s board of commissioners meeting, Higgins spoke about opportunities available at the state and federal levels to help small businesses as COVID-19 and statewide closures cause financial challenges for workers.
“Some of these programs, you have to have fewer than 100 employees. Others, you can have as many as 500 employees,” Higgins said. “But, almost all of these programs are first come, first served. When the money runs out, the money runs out.”
If business owners wait to ask for help, Higgins said the chance of them receiving assistance is unlikely.
“If we don’t cooperate to save our small businesses, many of them will be gone in a couple of months,” he said. “I’m asking small businesses to ask for help from your bankers, your landlords, your commercial mortgage holders, your suppliers, your customers and more. I have 30 years in the turnaround business. This is now a turnaround country at the moment.”
What state funds are available for small businesses?
Last week, Gov. Tom Wolf announced a new program under the Pennsylvania Industrial Development Authority’s Small Business First Fund — the COVID-19 Working Capital Access Program.
The Commonwealth Financing Authority authorized the transfer of $40 million to the Small Business First Fund for CWCA, and PIDA made $60 million available to provide loans of $100,000 or less to for-profit businesses with 100 or less full-time employees.
Loan terms are three years with a 12-year amortization. No payments will be due and payable in the first year. Principal and, if applicable, interest payments will be due monthly during years two and three, and 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.
CWCA loan applications must be submitted through a Certified Economic Development Organization. In Centre County, the Moshannon Valley Economic Development Partnership and SEDA-COG are authorized economic development organizations.
MVEDP Executive Director Stan LaFuria said his office in Philipsburg has received 65 inquiries from small businesses since the program launched.
“All have been provided the program guidelines and the application,” he said. “Most of the inquiries to date are from the Centre County, State College region.”
Higgins said SEDA-COG has received 19 applications.
SBA, federal funding aims to keep business operating
The United States Small Business Administration made low-interest loans available for small businesses and some nonprofits.
SBA’s Economic Injury Disaster loans offer up to $2 million in funding to help overcome temporary loss of revenue and can be used to pay fixed debts, payroll and utility bills. Businesses are assessed at an interest rate of 3.75%. Nonprofits are eligible to apply with an interest rate of 2.75%.
The Paycheck Protection Program directs $349 billion toward job retention and business operating expenses. The program offers a loan forgiveness component for an 8-week period. The program aims to allow business owners to keep workers on payroll by providing them with a loan up to $10 million for payroll and other expenses.
After these initial programs are exhausted, Higgins said it’s going to take several months for businesses to recover from the pandemic.
The Federal Reserves Main Street Business Lending program will use banks and credit unions to funnel short-term finances to businesses, so they can make payroll and stay afloat in the coming months.
Details of the Main Street lending program will be released in the coming weeks.
