Chester County Economic Development Council unveils $20M small business loan fund

On Thursday, the Chester County Economic Development Council (CCEDC) announced it would use $20 million in funding to provide loans to small businesses in eight counties across eastern Pennsylvania.

Called the Pennsylvania Catalyst Loan Fund, the money will be used for loans with fixed interest rates below prevailing bank interest rates. Ranging from $50,000 to $500,000, the loans would be provided by matching businesses in Berks, Bucks, Chester, Cumberland, Dauphin, Delaware, Lebanon, and Perry counties with partner lenders and requiring borrowers to provide equity of up to 20 percent. The loan terms are up to five years.

“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,” said Chris McHenry, CCEDC Vice President of Development Finance. “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.”

Business owners in the target counties should be preparing necessary documentation, including a business plan, financial projections, market research, major sales targets, and accountant and attorney information, officials said. The application process is expected to begin on Nov. 1, 2022.

“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,” CCEDC President and CEO Gary Smith said. “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. In particular, expanding credit access to socially and economically disadvantaged groups is a priority of our organization.”

The loan fund Is funded with money from the American Rescue Plan that was allocated to the CCEDC by Gov. Tom Wolf as part of an initiative to invest $268 million in small businesses across the state.