Economic Development Assistance COVID-19 Programs

Prepared by christopher Butchkoski, Alternate Member CCATO Executive Board

Intro:
I am writing to inform you that both State and Federal agencies have made available information for opportunities and damage mitigation during the COVID-19 disaster. Businesses in Pennsylvania have been struck specifically hard during these times as a result of “mitigation actions” that quickly resulted in the unemployment of 750,000 residence as of last month’s report from the Unemployment office. Relevant aid that is under Consideration: Disaster Unemployment Assistance, Crisis Counseling, Community Disaster Loans, and more. Life sustaining businesses listed here.
As of March 29, 2020, Governor Wolf requested Major Disaster Declaration for additional support from the Federal Emergency Management Agency (FEMA) signed to President Trump. Eligible expenses can include but are not limited to costs associated with paying overtime, or materials and equipment purchases. The declaration also provides direct federal assistance, which provides federal materials and supplies to support state and local response efforts.

Small Business Administration (SBA): provides direct assistance to businesses in applying for the Economic Injury Disaster Loan (EIDL). In response to the Coronavirus pandemic, eligible territories can apply with an advance on their loan up to $10,000, with working capital loans up to $2,000,000. The loan advance will provide economic relief to businesses that are currently experiencing temporary loss of revenue. Funding is made available within three days of a successful application, and advances on the loan will not have to be repaid.
EIDL Eligibility:

Applicant is not engaged in any illegal activity (as defined by Federal guidelines).
No principal of the Applicant with a 50 percent or greater ownership interest is more than sixty (60) days delinquent on child support obligations.
Applicant is not an agricultural enterprise (e.g., farm), other than an aquaculture enterprise, agricultural cooperative, or nursery.
Applicant does not present live performances of a prurient sexual nature or derive directly or indirectly more than de minimis gross revenue through the sale of products or services, or the presentation of any depictions or displays, of a prurient sexual nature.
Applicant does not derive more than one-third of gross annual revenue from legal gambling activities.
Applicant is not in the business of lobbying.
Applicant cannot be a state, local, or municipal government entity and cannot be a member of Congress.

Coronavirus Aid, Relief, and Economic Security Act (CARES):
This bill, signed recently by the President’s Administration, has allocated $2 trillion in much needed relief for our nation. $350 billion has been allocated to help small businesses. The stipulation being your business must keep workers employed amid the pandemic and economic downturn. “The Paycheck Protection Program”(PPP) provides 100% federally guaranteed loans to small businesses.
Most importantly, these loans may be forgiven if borrowers maintain payrolls for the duration of the crisis or restore payrolls afterward. Starting April 3, 2020 Small Businesses and Sole Proprietorships can apply. Starting April 10, 2020 Independent Contractors and Self-Employed Individuals can apply. THERE IS A FUNDING CAP, so apply quickly.

Lenders are directed to consider borrowers if they were in operation before February 15, 2020 and had employees for whom they paid salaried, payroll taxes or paid independent contractors. Lenders will also ask for a good faith certification that they will use the loan appropriately for maintaining payroll, and mortgage, lease, and utility payments. These interest payments will be 0% or 0.5%.
PPP Eligibility & Forgiveness:

Employer must maintain or quickly rehire employees and maintain salary levels
Forgiveness amount will be reduced if full-time headcount declines, or if salaries and wages decrease
Small Businesses with 500 or fewer employees, nonprofits, veteran organizations, tribal concerns, self-employed individuals, sole proprietorships, and independent contractors

Other Important lender/borrower information:

That the borrower sought and was unable to obtain credit elsewhere
A personal guarantee is not required for the loan
No collateral is required for the loan

COVID-19 Working Capital Access Program (CWCA):
Through the Pennsylvania Industrial Development Authority (PIDA) you can apply for a Working Capital program that any Certified Economic Development Organization can work with you to apply for. Currently, there is only $61 million funded for the entire Commonwealth, and this is a first come first serve application as well. Eligible uses for the Maximum Loan size of $100,000 with 0% interest rate:

100% of working capital costs incurred in the last 3 months for most businesses (including debt service, excluding fixed assets). Businesses in the retail/service sector can include working capital costs that were incurred in the last 6 months, however only 50% of those costs will be eligible which calculates to 3 months of business expenses
“Future” or “projected” costs are not eligible
NOTE: This program will require you to document the last three (3) months (or six (6) months for retail & service companies) of working capital expenditures

Eligibility:
Any for-profit businesses located in PA and with 100 or fewer employees worldwide are eligible to apply for disaster relief loans. Your application must be processed through the CEDO designated for the county where your business is physically located, which is CCEDC for Chester County.

How to request PA for essential Status:
Your next steps are to be certain of your operational status. To do this look State Departments master list. If you know that you are a Pennsylvania business that is on the list for those that are shut down and need an exemption, you are in luck as there is a process for obtaining a waiver request.
Summation:

Business Shutdown Waiver Request (if needed)
Contact Economic Development Council/Loan officers for CWCA
Contact/Register Online SBA for Payroll Program starting April 3rd
Register Online SBA for EDIL program, ask for an advance of $10,000
Register Online for Chester County for Profit Business Telephone Town Hall or go on your county website for equivalent information!

https://www.chesco.org/4454/Telephone-Town-Hall---third-in-a-series