Pennsylvania will offer $225 million to small businesses struggling with the effects of the coronavirus pandemic. At a press conference on Monday, Gov. Tom Wolf said residents must remain vigilant in the fight against COVID-19, but that the state can begin to focus on economic recovery.
The money will be distributed to community development financial institutions, or CDFIs, such as credit unions and non-profit loan funds, that will then make grants to qualifying businesses. The money can be used to help businesses pay debt, train employees or simply help cover the costs to reopen.
Some of the money, $25 million, will be used to help bolster CDFI reserves, while $100 million each will be allocated to main street businesses and historically disadvantaged businesses.
Wolf said they are finalizing eligibility and application guidelines but hope to have funds out by the end of the week.
“If we fail to assist small businesses we rely on, the landmarks of our main streets, we’re going to walk toward empty windows, leaving the fabric of our communities behind,” he said.
The goal is to get the money to businesses that are the most vulnerable and suffered the most during the pandemic, he said.
“We need to make sure people who have struggled due to structural inequality are helped during this especially painful and difficult time.”
Wolf said the new program will provide the liquidity businesses need to survive. According to the website of the Department of Community and Economic Development, small businesses make up more than 90 percent of Pennsylvania’s economy.
The grant money represents about nine percent of the $2.6 billion of federal funding Pennsylvania received from the CARES Act.