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.
U.S. Small Business Administration (SBA)
The Paycheck Protection Program (PPP) of the federal CARES Act has been re-authorized with $310 billion in additional funding for job retention and other small business expenses. The SBA resumed accepting PPP loan applications April 27.
The PPP provides small businesses with funding to pay up to eight weeks of payroll costs, including benefits. These dollars also may be used to pay interest on mortgages, rent, and utilities. A fact sheet is available as well as a document that addresses frequently-asked questions about the PPP, required documentation for applications, and what funds may be used for. Small businesses may apply through any existing SBA 7(a) lender or through any federally insured bank or credit union. You can find lists of participating lenders in the area on the SBA website.
PPP loan recipients are eligible for forgiveness of eligible payroll and non-payroll costs. The SBA has published a form to request forgiveness of eligible costs. The Loan Forgiveness Application Form is to be submitted to the lender that serviced the loan.
The SBA has extended its approval of disaster loan assistance to all Pennsylvania counties. The assistance provides up to $2 million loans to pay for fixed debts, payroll, accounts payable and other bills that can’t be paid by the disaster’s impact. The interest rate is 3.75% for small businesses and 2.75% for nonprofits. The loans can be repaid over terms up to 30 years. For information about disaster loan assistance, visit here.
The Lehigh Valley Small Business Development Center (SBDC) can assist with the application process. Visit here to contact them or for more information.
Pennsylvania Industrial Development Authority (PIDA)
PIDA’s Small Business First Fund provided $61 million to help businesses through the emergency. Under the PIDA COVID-19 Working Capital Access Program, for-profit small businesses with 100 or fewer employees worldwide were eligible for working capital loans of up to $100,000. The Pennsylvania Department of Community and Economic Development no longer is accepting applications for loans under this program.
Pennsylvania DCED Loan Payments Deferred
The Pennsylvania Department of Community and Economic Development (DCED) has decided to defer payments on business loans for the months of April, May, and June. The deferment includes all PIDA, Commonwealth Financing Authority (CFA), and Pennsylvania Minority Business Development Authority (PMBDA) loans.
During this three-month period, the electronic loan payment process will be suspended and borrowers who pay by check will not be required to submit payments. No late fees will be assessed, no additional interest will accrue, and the maturity dates of loans will be extended by three months. Regular electronic payments and payments by check will resume July 1, 2020.
If borrowers wish to continue making payments during the deferral period, they can mail checks to DCED Loan Accounting, P.O. Box 884, Harrisburg, PA 17108. Include the loan number on the check.
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.
Chamber COVID-19 Relief Fund
A grant pool has been established for Lehigh Valley businesses and nonprofits seeking relief as a result of COVID-19 through a partnership created by the Greater Lehigh Valley Chamber of Commerce. The Chamber distributed $350,000 in three phases to 320 small business owners to assist with rent, payroll, and other operating expenses. Priority was given to small retail shops, restaurants, and community staples operating on a main street or surrounding traditional neighborhood.
Applications are not being accepted at this time. For more information about the program, visit here.
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.