Pennsylvania Establishes $450 Million Loan Program to Assist Hospitals in the Fight Against COVID-19
On April 10, 2020, Pennsylvania Governor Tom Wolf announced the creation of a state loan program, entitled the Hospital Emergency Loan Program, or HELP for short, to assist hospitals that are facing unprecedented challenges from COVID-19. The loan program will provide immediate financial support to hospitals in Pennsylvania for working capital in order to retain health care personnel and acquire personal protective equipment. Governor Wolf noted that the pandemic has resulted in increased costs and reduced revenues for hospitals in the Commonwealth; and that it is the state’s responsibility to support them during this difficult time.
COVID-19 Emergency Loans for Pennsylvania Hospitals
HELP will be administered by the Pennsylvania Department of Community and Economic Development (DCED) through the Pennsylvania First Program, commonly known as PA First. The state funding is intended to provide immediate assistance to hospitals prior to receipt of any federal assistance under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Under HELP, disbursement of loan proceeds will be done through the Pennsylvania Infrastructure Investment Authority, commonly known as PENNVEST.
Starting April 13th and continuing until April 20th, Pennsylvania licensed hospitals, which qualify for federal grant funds under the CARES Act, may apply on the DCED website for financing under HELP. The maximum loan amount per hospital is $10 million with an annual interest rate of 0.5%. Any loan proceeds must be used to cover permitted expenses incurred between March 1st and September 1st. Permitted expenses under HELP will mirror those under the CARES Act, which will allow hospitals to close out their HELP loans with the CARES Act funds once they are received.