Hospital Emergency Loan Program (HELP)
On April 10, 2020, Pennsylvania introduced a loan program specifically for hospitals struggling under the financial strain caused by COVID-19. The $450 million program offers up to $10 million in immediate funds per hospital. The funds are intended as a short-term financing solution to help ensure hospitals awaiting federal grants under the CARES Act have enough personnel and equipment to meet the enormous increase in demand arising from the spread of COVID-19. Applicants must be Pennsylvania health care facilities licensed as hospitals by the Pennsylvania Department of Health under the Health Care Facilities Act of 1979 which are eligible to receive federal grant funding through the CARES Act.
According to the DCED, uses for the HELP loans include providing working capital* and allowing for purchases of fixed assets, machinery and equipment directly related to COVID-19, such as hospital beds and ventilators. The costs must be incurred between March 1, 2020 and September 1, 2020.
HELP loans carry a 0.5% interest rate and must be repaid via a balloon payment of the accrued interest and principal by the earlier of (i) September 25, 2020, or (ii) within thirty days after the receipt of grant funds through the CARES Act.
Pennsylvania Closes COVID-19 Working Capital Access Program
On March 25, 2020, Pennsylvania announced an interest-free working capital loan program for businesses impacted by the COVID-19 pandemic. The COVID-19 Working Capital Access (CWCA) Program is administered through the Pennsylvania Industrial Development Authority (PIDA). The goal of the program is to provide working capital financing to Pennsylvania small businesses dealing with economic hardship caused by the COVID-19 outbreak. The maximum loan amount is $100,000.
Pennsylvania stopped accepting applications on March 31, 2020. A total of $60 million in funding was initially allocated and over $75 million in loan requests were received. It is not clear if or when the program will re-open.
The SBA Focus Group of the COVID-19 Task Force at Klehr Harrison stands ready to assist you in your business and legal needs. We will continue to provide additional information and guidance as the PPP loan program is implemented.
Author Matthew McDonald is a partner in the Corporate & Securities Department.