Disaster declaration brings low-interest loans for small businesses in Pennsylvania, elsewhere

Small businesses that have lost revenue as a result of the coronavirus will be able to apply for low-interest loans now that Pennsylvania has received a disaster declaration from the U.S. Small Business Administration.

The action came a day after Gov. Tom Wolf asked for the declaration for all 67 counties and three days after he recommended the closing of all “nonessential” businesses.

“We are incredibly grateful that the SBA recognized the urgency of this situation and granted our request so quickly,” Wolf said. “I encourage our businesses and nonprofits to look at the SBA resources available to them and take advantage of this opportunity for financial assistance during this time of uncertainty.”

The declaration potentially releases millions of dollars in emergency loan funds for small businesses that have been forced to close by coronavirus fears.

James L. Smith, president and CEO of Economic Growth Connection of Westmoreland, said small-business owners need to familiarize themselves with the three-step process for applying for SBA Economic Injury Disaster Loans.

“If your business has suffered during this emergency, you need to get ready to file,” said county Commissioner Sean Kertes. “At this point, it’s unclear how much funding the SBA will earmark for Pennsylvania, so we urge our local businesses not to wait. We want the county economy to be well-positioned to emerge strong once this passes.”

The loans are for small businesses and nonprofit organizations that have lost revenue as a result of the coronavirus — and can be for up to $2 million, officials said.

Such loans can be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact, Wolf said. The interest rate is 3.75% for small businesses without credit available elsewhere and 2.75% for nonprofits.

Businesses with questions about the funding should contact the SBA Pittsburgh District Office at wpainfo@sba.gov.

Spokeswoman Janet Heyl said the SBA’s partner network in Western Pennsylvania still is providing confidential small business counseling via telephone and online training courses.

Those partners include the Chatham University Women’s Business Center, Duquesne University Small Business Development Center, Saint Vincent University Small Business Development Center, and University of Pittsburgh Small Business Development Center.

Other organizations in Allegheny and Westmoreland counties are offering assistance for small businesses.

The Greensburg-based Progress Fund, a nonprofit Community Development Financial Institution, is offering payment relief to its borrowers for the month of April, while Pittsburgh-based Honeycomb Credit is offering loans to small businesses that are in need of working capital during the pandemic.

Each small business relief loan will include a 45-day payment-free period and will be interest-only for six months. Capital can typically be obtained in as little as 30 days.

Honeycomb operates a platform where a business’ loans are funded by local investors. Unlike Kickstarter and other crowdfunding sites, Honeycomb allows investors to make micro-loans to businesses they support and get their money back with interest.