The Northwest Commission has begun accepting applications for the EDA CARES Act Revolving Loan Fund, which will help assist local small businesses in the eight counties in which we operate. The Commission has been awarded $5 million in CARES Act funds to assist businesses that have been negatively affected by the COVID-19 pandemic in Clarion, Crawford, Erie, Forest, Lawrence, Mercer, Warren, and Venango counties. These loans will be for small businesses in the 8-county region, so a business would be eligible if they have 100 or fewer employees, and if they have been in operations at least 9 months prior to applying. The minimum potential loan amount is $5,000 and the maximum is $500,000. These funds may be used to help assist companies with working capital expenses and/or they could be used to assist businesses in the purchase of machinery or equipment that could update their processes due to COVID-19. The term life of the loan can be up to 8 years, with an amortization period of up to 7 years, and payments will be deferred for the first 12 months of the loan. Loans will have a 0% interest rate throughout the life of the loan, and the loans will be able to finance up to 100% of the project. Currently, the Commission’s leveraging requirement is waived but we are still able to partner with banks and other lenders.
As for some financing parameters, applicants should be aware that for every $50,000 lent, they must be able to demonstrate the retention of one full-time job, or the creation of one full-time job within a three year period. Along with that, upon approval of a loan, a non-refundable fee of $450 will be collected as a means to help offset attorney costs, as loan closings will be done in-house. Lastly, each principal with 20% or more ownership must complete their own authorization to pull credit and personal financial statement, and they must sign a personal guarantee.
Application requirements:
- Project information:
- Documentation of the most recent three (3) months of fixed operating expenses (ex: Profit & Loss Statement) if applying for a loan to assist with working capital expenses
- Estimates, bids, or quotes required if applying for a loan to assist with COVID 19-related machinery or equipment
- Financial Statements & Tax Returns:
- Most recently filed corporate tax returns
- Management prepared interim financial statements (Balance Sheet or Profit & Loss Statement) covering the timeframe from the last filed tax return of the company to current (dated within 90 days)
- Company Debt Schedule (blank copy included with application)
- Company Information:
- Organizational Documents (Articles of incorporation, partnership agreement, etc.)
- Names of any affiliates or subsidiaries including relationship (with financial statements)
- Details of any bankruptcy proceedings or any pending lawsuits
- Owner(s) Management Information:
- Personal financial statements and most recently filed tax returns for all major stockholders (those owning 20% or more; if no single individual owns 20% or more, then the personal guarantees will be required of the three largest shareholders)
- Personal credit report
- Commitment Letter(s) from participating lender(s) (if applicable) detailing: Amount, interest rate, term & collateral, and all terms and conditions of financing
For more information contact:
Jacob McCord-Wolbert,
EDA Loan Specialist
jacobm@northwestpa.org
(814) 677-4800 ext. 112 |