COVID-19 Funding Starting to Flow to Lehigh Valley Companies
By Colin McEvoy on April 14, 2020
Emergency financing from regional, state, and federal levels is beginning to flow to Lehigh Valley small businesses that have been negatively impacted by the coronavirus pandemic and mitigation efforts that have required them to close or significantly curtail operations.
“It is crucial for companies that have closed or suffered revenue losses to find working capital to help create a financial bridge until they are cleared to operate again,” said Don Cunningham, President and CEO of the Lehigh Valley Economic Development Corporation (LVEDC). “We’re working diligently to ensure the business community is aware of the resources available so they can get the financing they need during this difficult time.”
State PIDA loans
The state is currently working to process loans for Lehigh Valley companies that have applied for financing through a Pennsylvania Industrial Development Authority program, the application window for which closed on March 31.
LVEDC submitted 26 applications for Lehigh and Northampton companies before the window closed. Those applications totaled $2.4 million in loan financing for regional businesses.
Jaime Whalen, LVEDC Vice President of Administration and Investor Relations and Chief of Staff, said LVEDC continues to communicate with the state to answer questions and provide information about the loan applications so that they can be processed and distributed as quickly as possible.
“Even after the loan applications were submitted, our staff has continued to work around the clock to provide the necessary information to the state and ensure emergency financial assistances is provided to the Lehigh Valley business community as rapidly as possible,” Whalen said.
Although the PIDA program is now closed, other COVID-19 emergency financing options remain available to Lehigh Valley companies.
Federal financing options
The Federal Reserve is providing up to $2.3 trillion in emergency financial aid. These loans are intended to assist households and employers of all sizes and bolster the ability of state and local governments to deliver critical services during the coronavirus pandemic.
“Our country’s highest priority must be to address this public health crisis, providing care for the ill and limiting the further spread of the virus,” said Federal Reserve Board Chair Jerome H. Powell.
“The Fed’s role is to provide as much relief and stability as we can during this period of constrained economic activity, and our actions today will help ensure that the eventual recovery is as vigorous as possible,” Powell said.
Visit here for more information about the Federal Reserve program.
Additionally, the federal Paycheck Protection Program (PPP) authorizes up to $349 billion in loans to small businesses to keep workers on the payroll and cover other business costs. It was created as part of the $2 trillion federal stimulus bill approved on March 27.
As of April 13, the U.S. Small Business Administration (SBA) has processed 587,000 loan applications totaling $151 billion through PPP, according to a report published by the commercial real estate research organization CoStar. It is unclear how much of that funding has yet been distributed to businesses.
UPDATE: As of April 16, SBA is no longer accepting applications for Economic Injury Disaster Loan COVID-19-related assistance. Funding for the program has been exceeded by the amount of assistance requested. SBA continues to process loan applications in the order they were received until funding runs out.
Locally, the Greater Lehigh Valley Chamber of Commerce and BB&T, now Truist, has been offering COVID-19 relief grants for regional businesses and nonprofits. Two application rounds have been offered for the program so far, both of which are currently concluded.
A total of 100 Lehigh Valley small businesses received checks of $1,500 from the first round of funding. A second round was opened the morning of April 14, and was closed after the Chamber received more than 150 applications in less than 30 minutes.
“Please know that we are working hard to secure a phase three of funding to help businesses in our communities,” the Chamber wrote on its website. “Be strong, Lehigh Valley!”
Northampton County established a $250,000 relief fund for small businesses that is administered by the Rising Tide Community Loan Fund. Businesses in the county with fewer than 100 employees can apply for no-interest loans of up to $15,000. An application form can be found here.
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