UWCHLAN — One week after Pennsylvania Governor Tom Wolf announced $268 million in American Rescue Plan funding to assist small businesses, the Chester County Economic Development Council (CCEDC) is providing detail about how some of those funds will benefit small businesses in eight counties across eastern Pennsylvania.
Almost $20 million of that funding is devoted to eastern Pennsylvania’s new regional loan fund, which the economic development council is administering. Called the Pennsylvania Catalyst Loan Fund, the Chester County Economic Development Council received the highest allocation of funding of all Certified Economic Development organizations in the state.
The Chester County Economic Development Council’s Pennsylvania Catalyst Loans will be underwritten and approved by the council for all business applicants in Berks, Bucks, Chester, Cumberland, Dauphin, Delaware, Lebanon County and Perry counties.
The Pennsylvania Catalyst Loan Fund features fixed interest rates that are below prevailing bank interest rates, and loans will typically range from $50,000 to $500,000.
The loan application process is expected to begin Nov. 1. Business owners should begin to prepare necessary documentation including a business plan, financial projections, market research, major sales targets, accountant and attorney information, according to a press release.
“What’s really exciting about this loan program is that we are able to help businesses and industries we have not been able to serve before, and on top of that, we can also provide direct technical assistance to help borrowers qualify for financing,” Chris McHenry, CCEDC vice president of development finance, said in a statement. “Previously, we have not been able to assist with loans for working capital and inventory, or lend to the retail sector unless they owned their building. This will be a real help to main street businesses that wouldn’t normally qualify for traditional loans.”
“We are delighted to be awarded these funds through the Pennsylvania Small Business Credit Initiative and are inspired by the collaboration with our colleagues in Southeastern and Central Pennsylvania, benefitting the entire region,” Gary Smith, CCEDC president and CEO, said in a statement. “This award will allow us, in partnership with five economic development partners covering seven other counties, to make critical investments in local small businesses of all kinds as they continue to grow and recover from the pandemic and its economic impacts.”
Smith added that expanding credit access to socially and economically disadvantaged groups is a priority of the economic development council.
“We are pleased that this program, which will offer below-market, fixed interest rate small business loans, enables us to make those investments on an even larger scale,” he said.
According to the release, business situations that might benefit include a store that wants to expand by purchasing inventory, buying equipment like shelving, and hiring more workers.
“A return on that investment can take many months, and a Pennsylvania Catalyst Loan can help bridge that gap,” the release stated.
Working capital funds can also be spent on items like vehicle upgrades, advertising, building supplies and renovations.
McHenry said the Chester County Economic Development Council is looking for business owners with either a positive operating history or entrepreneurs with strong business plans.
“It takes documentation and research to demonstrate that, and the time to start is now,” he added.
Pennsylvania Catalyst Loans require a match with a partner lender, with borrowers providing equity up to 20%. Loan terms are up to five years. For questions and initial assistance, each business should contact its county’s certified economic development organization:
• Berks County: Greater Berks Development Fund — 610-376-6739
• Bucks County: Bucks County Economic Development Corp. — 215-348-9031
• Chester County: Chester County Economic Development Council — 610-458-5700
• Cumberland County: Capital Region Economic Development Corp. — 717-232-4099
• Dauphin County: Capital Region Economic Development Corp. – 717-232-4099—
• Delaware County: Delaware County Economic Development Oversight Board — 610-566-2225
• Lebanon County: Lebanon Valley Economic Development Corp. — 717-274-3180
• Perry County: Capital Region Economic Development Corp. — 717-232-4099
Source: Berkshire mont