Gov. Tom Wolf rolled out the details of a $60 million loan program that will help Pennsylvania small businesses that are impacted by the closures and other disruptions due to COVID-19.
The COVID-19 Working Capital Access program, also known as (CWCA) was created by the administration's action and funded in part by the recent transfer of $40 million from the Commonwealth Financing Authority's Small Business First Fund. It will offer $100,000 in loans for for-profit businesses with less than 100 full-time employees.
The administration said funding will start to be available this week. Working capital means capital used for operations but not including fixed assets and production machinery or equipment. Eligible costs can be for three months before the submission; retail and other service companies can incur eligible working capital costs for six months before the application.
The loan must be applied for through a certified economic development organization. In southwestern Pennsylvania, that would be the Pittsburgh Economic and Industrial Development Corp., the Regional Industrial Development Corporation of Southwestern Pennsylvania, The Progress Fund, North Side Industrial Development Co./Riverside Center for Innovation, or the Southwestern Pennsylvania Corp.
In a news conference, Wolf said he knew that businesses and workers were bearing the brunt of the actions to stem the spread of the novel coronavirus, which has closed all schools, all non-life-sustaining businesses and led to stay-at-home orders in Allegheny, Erie and other counties in the the commonwealth. He said the loan program was a step in the right direction. "But I'm not going to pretend it's enough to cover the devastation that COVID-19 is bringing to our commonwealth." He said his administration was working to help businesses, and said that everyone has a role to play. "I need every Pennsylvanian to step up and ensure our economic future by minimizing the spread of COVID-19 right now," Wolf said.
That's because the reason for all the closures is to minimize person-to-person contact, which spreads the highly virulent disease and leads to illness and, for about 10 percent of those sickened, critical illness needing hospitalization and in some cases, death. Health Secretary Dr. Rachel Levine said that Pennsylvania was a couple of weeks away from having a potentially overloaded health care system, and she and Wolf said that everyone needed to do their job to keep that from happening.
No payments would be due within the first year, and principal and interest would be due in the second and third year of the loan, while there's a balloon payment at the end of the third year. The interest rate for everyone but agricultural producers is 0 percent.