State COVID-19 Relief Programs

Rev. March 30, 2020

In addition to the Federal Government’s Families First Coronavirus Response Act, various states have acted to provide relief to families and businesses during the COVID-19 pandemic. Summaries of some of the measures enacted by several states specifically targeted to businesses are below. Importantly, applying for or receiving funding through any of the programs detailed below does not impact eligibility for a federal SBA loan.

Pennsylvania

COVID-19 Working Capital Access Program

The Pennsylvania Industrial Development Authority (“PIDA”) has established this program to provide working capital financing to small businesses located in Pennsylvania that have been adversely impacted by the COVID-19 pandemic.

The loan application must be submitted through a Certified Economic Development Organization (“CEDO”) designated for the county where the business is physically located. A list of CEDOs located here.

Terms:

  • Maximum loan amount – $100,000
    • For retail/service enterprises, only finances 50% of eligible working capital costs up to $100,000 (includes for profit enterprises engaged in business-to-business service, business to public service, mercantile, commercial, or point of sale retail)
  • Three-year loan with 12-year amortization
    • No payments due in the first year
    • Monthly payments during years two and three with balloon payment at the end of the third year
  • Secured by blanket lien on all business assets currently owned or acquired in the future

Eligibility:

  • For profit business entities located in Pennsylvania with fewer than 100 full-time employees at the time of application
  • Business and its principals must be current in payment of all federal, state, and local taxes (being current on any existing workout agreement is acceptable)
  • Overall debt service coverage ratio at least 1:1 or higher
  • Available for working capital for operations excluding fixed assets and production. equipment. Cannot be used, directly or indirectly, to pay or reimburse owners, partners, or shareholders of the business except as ordinary compensation, or to finance a project located outside of Pennsylvania.

Additional PIDA Funding:

Businesses that apply to the COVID-19 Working Capital Access Program can also apply to PIDA’s traditional lending program for businesses that commit to creating and retaining full-time jobs and for the development of industrial parks and multi-tenant facilities. For more information, click here.

City of Philadelphia

The Philadelphia COVID-19 Small Business Relief Fund

The City of Philadelphia and Philadelphia Industrial Development Corporation (“PIDC”) established three separate COVID-19 relief programs, each providing relief to Philadelphia-based small businesses, and nonprofits that engage in for-profit activity, in different annual revenue categories as described below. The PIDC subsequently indicated that due to extraordinary demand, beginning at 5:00 pm on March 30, 2020, it would not accept more applications for the Small Biz Grant or the Small Biz Zero-Interest Loan.

Businesses that qualify may still apply for the Microenterprise Grant.

  • Microenterprise Grant:
    • Eligibility: Businesses with annual revenue under $500,000
    • Grant Amount: $5,000
  • Small Biz Grant: UNAVAILABLE
    • Eligibility: Businesses with annual revenue from $500,000 to $3,000,000
    • Grant Amount: Up to $25,000
  • Small Biz Zero-Interest Loan: UNAVAILABLE
    • Eligibility: Businesses with annual revenue from $3,000,000 to $5,000,000
    • Loan Amount: Between $25,000 – $100,000

To be eligible, businesses must:

  • have a physical commercial location in Philadelphia; and
  • not be in active default with taxes owed to Philadelphia

All applicants will need to provide:

  • Signed tax return to confirm annual revenue; and
  • A description of the impact of COVID-19 on the business and the business’ recovery plan

Applicants for the Small Biz Grant and Small Biz Zero-Interest Loan will also need to provide:

  • 2019 financial statements;
    Verification of cash flow needs; and
    Proof of insurance

New York State

Pursuant to Executive Order 202.9 issued by Governor Cuomo on March 21, 2020, the New York Department of Financial Services will find any bank it regulates has committed an unsafe and unsound business practice if it fails to grant a forbearance for a period of 90 days to any person or business who has a financial hardship as a result of the COVID-19 pandemic.

The New York State Urban Development Corporation d/b/a Empire State Development (“ESD”) has not announced any specific relief programs that will be available to New York businesses in response to the COVID-19 pandemic. At its March 26, 2020 Directors meeting, however, ESD authorized several steps to facilitate future programs and to provide increased assistance to businesses applying for SBA relief and future state and federal programs.

ESD authorized its President and CEO (or their designated representatives) to enter into COVID-19 relief assistance contracts up to $1,000,000. These contracts may include unspecified grant disbursement agreements and loans. This authorization will last for six months unless further extended. This will allow the ESD to more quickly respond to requests for assistance and reduce the amount of time for money and assistance to reach small businesses.

ESD approved grants of $110,000 to each of the 24 New York State Entrepreneurship Assistance Centers and 23 Small Business Development Centers, and grants of $100,000 to 23 Community Development Financial Institutions to enhance each entity’s capacity to assist small businesses that need to apply for federal and state COVID-19 assistance programs, including SBA Disaster Loans.

New York City

The New York City Economic Development Corporation has implemented two programs to provide small business relief to businesses located in New York City.

New York City Employee Retention Grant Program

Will cover 40% of payroll costs for two months.

Available to businesses (including non-profits):

  • with 1-4 employees
  • located within the five boroughs of NYC
  • that have operated for at least six months
  • have no outstanding tax liens or legal judgments; and
  • can demonstrate that the COVID-19 outbreak has caused at least 25% decrease in revenue

More information and link to apply available here.

New York City Small Business Continuity Loan Fund

Loans up to $75,000 with zero interest to help ensure business continuity.

Available to businesses (including non-profits):

  • with fewer than 100 employees in all locations
  • located within the five boroughs of NYC
  • that have no outstanding tax liens or legal judgments
  • can demonstrate the ability to repay the loan; and
  • can demonstrate that the COVID-19 outbreak has caused at least 25% decrease in revenue

Link to the pre-application available here.

Delaware

Expanded Hospitality Emergency Loan Program

No interest loans up to $10,000 per business per month.

Available to businesses (and non-profits):

  • with annual revenue up to $2.5 million
  • that has been open for at least one year; and
  • is classified as one of several NAICS codes related to hospitality and personal care services

Loans will have a term of 10 years with all payments deferred for the first nine months. More information and application available here.

If you have any questions, please contact John N. Visconi at 201.857.6762, or contact the Stevens & Lee attorney with whom you regularly work.

©2020 Stevens & Lee, a Pennsylvania Professional Corporation. Richard J. Pinto, attorney responsible for the New Jersey office.

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