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The Capital Region Economic Development Corporation (CREDC) has announced its participation with five other economic development organizations in securing $20 million through the State’s Small Business Credit Initiative, named “The Pennsylvania Catalyst Loan Fund.”
Should the state meet utilization requirements, funding will be available to lend through three tranches. The requirements include loaning 5.7% of the funds to qualified “Very Small Businesses” of 10 or less workers and 31.29% to SEDI (Socially and Economically Disadvantaged Individuals) Borrowers.
Open for application is the first tranche of approximately $6 million for all participating economic development organizations. Of that tranche, $1.2 million is reserved for qualifying small businesses in CREDC’s service area of Cumberland, Dauphin, and Perry Counties. If all three tranches can be accessed, a total of $4 million will be reserved for lending in these three counties.
A small business must meet the following requirements to be eligible to apply for the Pennsylvania Catalyst Loan:
- Be a for-profit business.
- Demonstrate a need for credit.
- Meet the definition of a small business according to the SBA size standards.
- Operate in Pennsylvania.
Funds can be used to support various sorts of business, including the following:
- Fixed Assets
- Inventory & Supplies
- Soft Costs
- Wages
- Working Capital
Every dollar loaned by the Pennsylvania Catalyst Fund must be matched by at least one dollar from a private credit source. CREDC and partnering economic development organizations are working to identify private lending sources interested in supporting the program and small businesses.
The State’s Small Business Credit Initiative comes from the American Rescue Plan Act (ARPA) of 2021. ARPA included provisions to establish loan funds to help small businesses recover and rebuild in response to the impact of COVID-19.