URA Forgives COVID-19 Related Small Business Loans with American Rescue Plan Act Funding
PITTSBURGH, PA (December 20, 2021) The Urban Redevelopment Authority of Pittsburgh (URA) announced today that it is forgiving a portion of COVID-19 related small business loans deployed between March and November 2020 thanks to $3.5 million of American Rescue Plan Act of 2021 (ARPA) funding allocated by Mayor William Peduto.
“Small businesses are the backbones of our neighborhood main streets. I want to commend the URA leadership and staff for reacting quickly and nimbly in 2020 to support these businesses. By forgiving loans, the City and URA are taking another step to aid our economic recovery and invest in the future of Pittsburgh small business,” said Mayor William Peduto.
In March 2020, COVID-19 restrictions forced many small businesses to close their doors unexpectedly. They could no longer serve customers and bring in revenue but their fixed costs such as rent, insurance, and payroll continued to accrue. In response to this crisis, the URA created the Emergency Loan Fund (ELF) program to distribute up to $15,000 in 0% interest loans to businesses that needed help. All repayments were deferred for six months, giving businesses time to adjust to the new restrictions and to start generating revenue.
Between March and August 2020, the URA deployed 217 COVID-19 ELF loans. Of those loans, 69% of the business were making less than $500,000 in annual revenues; 66% were women or minority-owned businesses. The program disbursed $2,908,299.
In June 2020, the URA launched the Recovery Loan program to help businesses come out of the COVID-19 lockdown restrictions. Loans of up to $75,000 allowed businesses to pivot and recapitalize. All loan repayments were deferred for one year at 0% interest. Following the deferment period the interest rate adjusted to 2%.
Between June and November 2020, the URA deployed 67 COVID-19 Recovery Loans. Of those loans, 67% were women or minority-owned businesses. The program disbursed $3,866,744.
The URA started the execution of loan forgiveness this past summer. In July 2021, the URA stopped soliciting ELF loan borrowers for payments. In August, all ELF loan borrowers received an email and a mailing notifying them that the outstanding balances on their loans were forgiven.
The $591,701 remaining after the ELF loan forgiveness will go towards reducing outstanding balances for Recovery Loan borrowers.
"It is very exciting to be able to use a portion of the ARPA dollars for loan forgiveness,” said URA Chief Lending and Solutions Officer Jennifer Wilhelm. “It is very good news for many companies that have struggled over the last two years. We have heard from many happy borrowers."
Nicolette Garcia-Pawlowski, president of Los Sabrosos Dance Co., was one of those happy borrowers who replied, “Thank you soooooooooo much for this letter. I read it with tears of joy. Thank you for all the work that the URA of Pittsburgh does. We really really appreciate it!”
Taylor Ford, CEO of IT’s 4 Me, replied, “I greatly appreciate all that the URA has done for my business. Thank you. God bless.”
“THANK YOU SO MUCH! This is the best news I've received in a very long time,” said Adele Morelli, owner and buyer, Boutique La Passarelle.