COVID-19 Financing Options
State and federal agencies are providing financing assistance to small businesses impacted by the COVID-19 pandemic and mitigation efforts. This page provides important information and connections with special government financing programs during the current emergency, as well as the regular financing options available through LVEDC and the Lehigh Valley Lending Network.
Pennsylvania COVID-19 Relief Statewide Small Business Assistance
The Pennsylvania Department of Community and Economic Development (DCED) will provide grants of $5,000 to $50,000 to small businesses hurt by the COVID-19 pandemic. The state allocated $225 million for this program. Community Development Financial Institutions (CDFIs) will administer the grants, including the Rising Tide Community Loan Fund for Lehigh Valley.
To be eligible for grants, businesses must have less than $1 million annual revenue, have had 25 or fewer full-time employees before Feb. 15, 2020, and have been in operation as of Feb. 15, 2020.
At least 50% of the grants will go to Historically Disadvantaged businesses: those that are at least 51% owned and operated by people who are Black, Hispanic, Native American, Asian-American or Pacific Islander. Additional consideration will be given to women-owned businesses, rural communities, and communities targeted for investment by state programs such as Main Street. DCED has posted a factsheet with program information.
Pennsylvania COVID-19 Hazard Pay Grant
Pennsylvania established a COVID-19 Hazard Pay Grant Program to help employers provide hazard pay to employees who work in life-sustaining occupations. The purpose is to help employers retain these key employees. The reimbursement-based grant is for employers in selected industries that offer hazard pay during the eligible program period.
Program guidelines specify that grant funds may be used for hazard pay for employees who make less than $20 per hour, excluding benefits and overtime, for the 10-week period from Aug. 16, 2020, to Oct. 24, 2020. Eligible industries are: Health Care and Social Assistance, Food Manufacturing, Food Retail Sales, Public Transit and Ground Transportation, Security Services (for businesses that remained open during the period of business restrictions related to the pandemic), and Janitorial Services.
Applications will be accepted from July 16 to July 31.
Northampton County COVID-19 Relief Small Business Grant Program
Northampton County has allocated $4 million in federal CARES Act funding to establish a COVID-19 Relief Small Business Grant Program for businesses primarily operating in the county that have fewer than 100 employees.
The grant program is administered by the Greater Lehigh Valley Chamber of Commerce on behalf of the county. The Chamber will conduct outreach to vulnerable and disadvantaged businesses to ensure they have access to grant applications. Eligible businesses may apply for up to $15,000 in grants to cover expenses related to the pandemic.
Grant funding may be used to cover payroll costs, costs related to continuation of group health care benefits, insurance premiums, mortgage or rent payments, utility bills, working capital to cover the costs of reopening businesses that were closed due to the pandemic, expenses related to meeting guidelines for reopening (specialized equipment, barriers, protective equipment, employee training, etc.), and any COVID-19 expense not already covered by other federal, state, or regional grant and loan programs.
Lehigh County COVID-19 Relief Small Business Grant Program
Lehigh County has allocated $5 million in federal CARES Act funding to establish a COVID-19 Relief Small Business Grant Program for companies with 100 or fewer employees. Eligible businesses can apply for up to $15,000 to mitigate the effects of the pandemic.
The grant program is administered by the Greater Lehigh Valley Chamber of Commerce on behalf of the county.
Grant funding may be used for payroll costs, rent and utility payments and other business expenses related to COVID-19. Farms may qualify if they have fewer than 100 employees.
U.S. Small Business Administration (SBA) Relief Options
The Paycheck Protection Program (PPP) has been extended. Loan applications are being accepted again. The new deadline to apply for PPP assistance is August 8. PPP is a loan program intended to provide a direct incentive for small businesses to keep employees on their payroll. A PPP fact sheet is available as well as a document that addresses frequently-asked questions. PPP loan recipients may request forgiveness if they meet employee retention criteria and funds are used for eligible expenses. The Loan Forgiveness Application Form (or EZ Loan Forgiveness Form) is to be submitted to the lender that serviced the loan.
Economic Injury Disaster Loans (EIDL) for eligible small businesses provide up to $2 million to pay for fixed debts, payroll, accounts payable and other bills. The interest rate is 3.75% for small businesses and 2.75% for nonprofits for terms up to 30 years.
SBA Express Bridge Loans allow small businesses that have existing relationships with an SBA Express Lender to access up to $25,000 quickly to help overcome temporary loss of revenue, and to bridge the gap while applying for an EIDL loan. The bridge loan will be repaid in full or in part by proceeds from the EIDL loan.
SBA is providing Debt Relief to small businesses affected by the pandemic with existing SBA loans. The SBA will pay 6 months of principal, interest, and associated fees for 7(a), 504, and Microloans. Borrowers do not need to apply for relief, it will be automatically provided. Borrowers should contact their lenders with questions about payment relief. This is not available for PPP or EIDL loans.
For information about federal disaster loan assistance, visit here.
The Lehigh University Small Business Development Center (SBDC) can assist with the application process and provide additional information about SBA assistance programs.
Federal Reserve Main Street Lending Program
The Federal Reserve’s Main Street Lending Program is designed to help credit flow to small businesses that were in sound financial condition before the pandemic but now face cash flow interruptions. The program offers 5-year loans of $250,000 to $3,000,000 with floating rates and principal payments deferred for two years and interest payments deferred for one year.
The Federal Reserve Bank of Boston is registering interested lenders through the program portal. Businesses will apply for loans from participating lenders, who will determine eligibility and loan approval.
The Federal Reserve intends to purchase 95% of Main Street Lending Program loans to share the risk that otherwise would be absorbed solely by lenders, creating additional capacity for lenders to extend more loans.
Pennsylvania Industrial Development Authority (PIDA)
PIDA’s Small Business First Fund provided $61 million under the COVID-19 Working Capital Access Program for small businesses with 100 or fewer employees. Businesses were eligible for working capital loans of up to $100,000. The program closed March 31; the Pennsylvania Department of Community and Economic Development no longer is accepting applications.
Northampton County COVID-19 Small Business Emergency Relief Fund
Northampton County has established a $250,000 emergency relief fund for small businesses in the county with fewer than 100 employees that have been in operation for at least one fiscal year. The Rising Tide Community Loan Fund will administer the program and process applications. An application form is available on the Rising Tide website. Applicants can apply for a maximum amount of $15,000. Loans will have 0% interest over a 12-month term.
Access to the lowest-cost loans available
The Lehigh Valley Lending Network (LVLN) is an award-winning, nationally recognized unique partnership of local financial institutions with a goal to create efficiencies in accessing credit and other resources within the private commercial lending community. The Lending Network also provides the client with resources to maximize the use of incentives available through the economic development community and to connect borrowers to a lending network that provides business financing & commercial loans at fixed-rates in Lehigh Valley for machinery, equipment and more.
The LVLN provides a single point of access to allow business financing proposals to be broadcast to many commercial lending institutions simultaneously. Additionally, the financing programs that Lehigh Valley Economic Development Corporation (LVEDC) administers on behalf of the Lehigh Valley’s regional economic development organizations may be marshaled to assist in a given project.
The membership of the LVLN is comprised of private commercial lending institutions serving the Lehigh Valley.