Small businesses with 100 or fewer full-time employees have the opportunity to apply for a $100,000 low-interest loan through the Pennsylvania Industrial Development Agency (PIDA), state officials said this week.
This opportunity comes as the officials approved $61 million to be allocated as low-interest loans for small businesses impacted by the economic toll of COVID-19. The PIDA will open the application process in the near future, and the guidelines for qualifying businesses have been drafted.
Qualifying businesses will need to verify that over the past three months they have spent an amount equal to their loan request on direct business expense — payroll, utilities, rent, debt and inventory, etc. — up to the maximum $100,000 loan amount.
Retail businesses will need to show a 1:1 match on expenses over the past six months. In other words, these businesses must verify they spent at least $200,000 on direct business expenses in order to realize a maximum loan amount of $100,000.
There are no application fees associated with the loan, and neither payments nor interest during the first year are included in the terms of the loan, according to an announcement from Senator Scott Martin, R-Lancaster County.
The interest rate ranges from 0%-3%, according to state Rep. Justin Simmons, R-Lehigh County.
“The outbreak of this virus and subsequent mitigation efforts have forced thousands of establishments to either close or significantly change their business practices,” Simmons said. “Fortunately, help is on the way for small businesses all over the state.”
The federal Small Business Administration (SBA) has also worked with state officials to support small businesses impacted by the spread of the coronavirus (COVID-19) with up to $2 million in targeted, low-interest disaster recovery loans.
President Trump’s National Emergency declaration — the “Coronavirus Preparedness and Response and Supplemental Appropriations Act” — in response to the COVID-19 spread in the U.S., authorizes the SBA to offer Economic Injury Disaster Loans to struggling small businesses, according to the SBA.
“The president’s declaration, coupled with the administration’s unprecedented efforts to mobilize and involve the full force of the federal government and the private sector — including leaders in science, medicine, transportation, finance and business — will help save lives and reduce economic disruptions in every community,” said SBA Administrator Jovita Carranza.