Businesses affected by the COVID-19 pandemic may be eligible for financial relief from the state or federal government, with a number of Lebanon County businesses vying for these programs.
“I’ve had a lot of conversations with small companies as well as some larger ones,” said Karen Groh, Lebanon Valley Chamber of Commerce president and CEO, “Larger companies, especially those that are allowed to be open, are being asked by employees for some assurance that their working environment is safe. But many smaller businesses I’ve spoken with have been affected by reduced income.”
In an April 3 phone interview, she said she’s receiving updated information daily on various aid programs and in-turn is sending it out in an email blast. One program that was available for a short time was the state Department of Community and Economic Development’s COVID-19 Working Capital Access Program. Applications were capped at $100,000 per business and were accepted through certified local economic development organizations. Lebanon Valley Economic Development Corp. accepted applications for the county. Groh said 18 Lebanon County businesses filed for $1.411 million in aid through the program.
The loans through this program will have three year terms and 12-year amortizations at zero percent interest (except for agricultural producers for whom the interest rate would be 2%).
“There was a lot of interest in this program—within two days there were more than enough applications for the funding that was allocated by the state. I’ve heard that the majority of applications throughout the state should be funded,” she said.
With all the attention on these programs, the circumstances are unfortunately also ripe for people to be exploited. The Department of Justice has been identifying different scams at its coronavirus resource page. Groh advises both business owners and consumers to be aware of coronavirus scams including grant scams and fraud schemes.
Funding for businesses is also available through the CARES Act (Coronavirus Aid, Relief and Economic Security Act), legislation that was signed into law by President Donald Trump on March 27. It not only provides direct payments to individuals and families, but it also assists businesses with several programs.
The Paycheck Protection Program provides cash-flow assistance through federally guaranteed Small Business Administration (SBA) loans administered by banks and credit unions. If the employer maintains payroll, the portion of the loan used to cover employee salaries and limited other expenses will be forgiven. “I think it’s an incentive for companies that are allowed to stay open to do so and to keep employees on the payroll,” Groh said, “The program also applies to non-profits.”
SBA funding through the CARES Act also expands eligibility to Economic Injury Disaster Loans (EIDL) and provides an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within 3 days of applying for an SBA Economic Injury Disaster Loan (EIDL). According to SBA information the advance does not need to be repaid and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent, and mortgage payments.
“We are a non-profit ourselves, and we don’t know how funding will be provided (through this program),” said Downtown Lebanon Main Street manager Amy Kopecky in a phone interview on April 2, “I’ve been involved in several webinars about SBA funding. I’ve only had one business reach out to me so far.”
“Business owners are looking to us as a resource for guidance,” Groh said. She added that the guidance may be in the form of information about the various programs available or perhaps assistance in completing the application forms for aid. “It’s important to know which of the programs requires funds to be paid back, and which may be forgiven, “she explained, “It’s important to complete the application that’s applicable to the business. My suggestion to business owners is to apply for what they realistically may need—an amount that can be backed up by evidence of your loss—otherwise action on the application may be delayed since it’s for an amount that doesn’t make sense.”
Troy Peters, president and CEO of Jonestown Bank & Trust Co., said on April 1, that the bank is awaiting guidance on how the SBA programs will work. “The SBA is overwhelmed right now. I’ve had a lot of discussions over the past few days and am receiving daily updates.” When LebTown spoke with Peters last week, he was anticipating entering this week with more answers.
Peters said he’s been meeting with representatives of the state Department of Banking, the Federal Reserve, FDIC (Federal Deposit Insurance Corp.), and Congressman Dan Meuser (R-9). “They’re excited to get this done, there are a lot of people working on it,” he said of economic aid to businesses.
Groh said the current situation is a unique and unprecedented set of circumstances. “Business owners want to know there’s a solution—something that can help them. Even if the mechanisms are not in place yet to access the funding, the fact that will be some assistance is important,” she said.
JBT also has developed a program for its clients—Client Assistance Program (CAP). Peters said it was developed specifically for this crisis. “We are the only community bank headquartered in Lebanon County, and we’re heavily invested in the area. We’re intent on working with people in our market to get through this,” he said
Through the CAP, consumers and businesses that have been negatively affected by the pandemic may defer payments on loans. Any consumer or commercial fixed term loan in good standing is eligible for the CAP without cost, and there are no documents to sign. Payments may be deferred for three months. Interest does accrue, however there is no fee, and deferred payments are not reported as “late” to credit bureaus. If anyone would like to make a payment during the period they can.
This pandemic is “something we haven’t experienced before,” said Peters, adding, “We will get through it.
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Full Disclosure: The Lebanon Valley Chamber of Commerce and Jonestown Bank & Trust Co. are advertisers on LebTown. LebTown does not make editorial decisions based on advertising status and advertisers do not receive special editorial treatment. Learn more about LebTown’s advertising program here.