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Tag: Small business

Deadline approaches to apply for Hurricane Ida disaster loans

The U.S. Small Business Administration is reminding businesses in Pennsylvania that were affected by the remnants of Hurricane Ida from Aug. 31 to Sept. 5 of last year to apply for working capital loans before the June 10 deadline.

The federal Economic Injury Disaster Loan program is available to small businesses, small agricultural cooperatives, small businesses engaged in aquaculture, and private nonprofit organizations, an SBA release said.

The loans, not intended to replace lost sales or profits, are for working capital needs caused by the disaster and are available even if the business did not sustain physical damage. Loan amounts range up to $2 million with interest rates of 2.855% for small businesses and 2% for private nonprofits, with terms up to 30 years.

In Pennsylvania, the disaster declaration covers the counties of Adams, Bedford, Berks, Blair, Bucks, Cambria, Carbon, Chester, Cumberland, Dauphin, Delaware, Fulton, Huntingdon, Lancaster, Lehigh, Monroe, Montgomery, Northampton, Philadelphia, Somerset and York.

Also falling under the declaration are New Castle County, Delaware; Allegany, Baltimore, Carroll, Cecil and Harford counties in Maryland; and Burlington, Camden, Gloucester, Hunterdon, Mercer and Warren counties in New Jersey.

Business owners may apply online, under SBA declaration No. 17166, using the electronic loan application form at DisasterLoanAssistance.sba.gov/ela/s. Information and application forms can also be obtained by calling the SBA at 800-659-2955.

Paula Wolf is a freelance writer.

Highmark Health partners with tech platform, looks to streamline member access to specialty medications 

Highmark Health is working with a Pittsburgh-based health care technology startup to streamline member access to prescription drugs from specialty pharmacies. 

Free Market Health, a cloud-based marketplace created to make it easier for insurers to authorize specialty medications to the pharmacy, and ultimately the patient, announced that it has raised $13.5 million in Series A Funding. 

Highmark’s capital investment arm, Highmark Ventures, was one of a number of companies, including 653 Investment Partners and Alta Partners, to support the funding round. 

Highmark has worked with Free Market Health’s market platform to remove pain points in the specialty pharmacy process, said Sarah Marche, senior vice president of pharmacy services for Highmark Inc. 

“Our collaboration with Free Market Health means that Highmark members will enjoy quicker access to prescription drugs for chronic, high-cost health conditions, from specialty pharmacies tailored to serve their particular condition,” Marche said in a press release. “Working with Free Market Health advances our goal of transforming the pharmacy experience for our members and ensuring they have access to proven, affordable prescription drugs that help them be at their best.” 

Specialty drugs make up just under half of Highmark’s $5 billion in annual drug spending, while specialty drugs make up less than 1% of the insurer’s claim volume, according to Marche. 

“A very small percentage is driving a large percentage of our spend,” she said, adding that Highmark is currently collecting data to see what savings it can see under the platform. “We are not at the point of having a full savings report.” 

Free Market was founded in 2019 with the goal of balancing the cost of care and the value that care provides. The company wrote in its release that it has a year of full scale operating under its belt and in that year, it has facilitated a match of thousands of specialty medication referrals and has hundreds of millions of dollars in specialty medication spend under management. 

“Until now, no model seamlessly matched patients to the specialty pharmacy best suited for their care needs, let alone enabled the type of value orientation under a market-driven and dynamic reimbursement framework,” said Pete Hudson, managing director at Alta Partners, a health care venture capital firm. “Free Market Health sits at the intersection of price, value, and efficiency, for the ultimate benefit of the patient.” 

SBA introduces additional deferment on COVID-19 loans 

The U.S. Small Business Administration (SBA) announced it will be extending deferment on its loan program for small businesses’ recovering from the impacts of COVID-19. 

The deferment extension is effective for all COVID Economic Injury Disaster Loans approved in 2020, 2021 and 2022. The loans now have a total deferment of 30 months from the date that the borrower received the loan. 

Interest will continue to accrue on the loans during the deferment. 

The extended deferment period will provide additional flexibility to small business owners impacted by the pandemic, especially those in hard-hit sectors, the administration wrote in a statement on Tuesday. 

“Though our small business owners continue to power a historic economic recovery under the Biden-Harris Administration, we must continue to do everything in our power to meet our small businesses where they are with resources to ensure they can recover and thrive,” said SBA Administrator Casillas Guzman. “This extended principal and interest deferment will provide financial relief to millions of small business owners – particularly those hardest-hit by the pandemic and related marketplace challenges – so they can continue to pivot, adapt, and grow.” 

Borrowers through the program can make partial or full payments during the deferment period. After the period ends, borrowers will be required to continue making regular principal and interest payments. 

The SBA made a number of changes to the COVID Economic Injury Disaster Loan program in 2021.  

Those changes included lifting the loan cap from $500,000 to $2 million, implementing a deferred payment period, expanding the eligible use of funds and establishing a 30-day exclusivity window. 

PNC survey shows supply chain plaguing small business owners

Supply chain issues top the list of concerns for small business owners over the last six months, but they see those pressures easing by mid-year.  

In the meantime, inflation pressures are expected to continue to impact these business owners, with a majority planning to further raise their own prices in the near term, according to the latest PNC semi-annual Economic Outlook survey of small and mid-size business owners and executives. 

“The events in Ukraine were not on the minds of business owners when the survey was conducted in January,” said Gus Faucher, PNC chief economist, “There was concern at that time about rising prices, and that worry has likely intensified now given the rapid increase in energy prices, among other factors.” 

In January, a third (34%) of owners who rely on a supply chain said timeliness had worsened in the previous six months.  

Concern about supply chain disruptions was highest in the manufacturing (56%), wholesale/retail (51%) and construction (38%) sectors.  

More than a quarter (28%) of businesses that rely on inventory are faced with the challenge of not having enough supply to meet expected demand. However, six in 10 (57%) expect the timeliness of their supply chain issues to improve in the next six months. 

“Supply chain problems have been a big contributor to the highest inflation the U.S. has seen in almost 40 years. But it is encouraging that most small businesses see supply chain problems easing in the months ahead, which would contribute to a slowing in inflation,” Faucher said. “The wild card now is how long high energy prices and other inflationary factors due to the Ukraine crisis last.” 

Rising prices also are on the minds of business owners. Half (51%) of businesses expect to increase the prices they charge in the next six months, with 36% expecting hikes of 5% or more.  

Nearly two in 10 (16%) of those expecting to increase prices plan to raise them by at least 10%, more than double those respondents who anticipated a similar move last fall (6%). One in three (34%) say their prices already have gone up in the past six months, with four in 10 hiking them by 5% or more. 

Among the 51% expecting to increase their prices, nearly two-thirds (63%) are doing so because they are attempting to keep up with rising non-labor costs, a significant increase compared with 33% in the fall. 

“Six months ago, businesses were raising prices because demand was strong enough that they could. Now it appears they’re raising prices because higher costs are forcing them to,” Faucher said. 

 

Changes to tipped worker rules awaits regulatory approval 

An update to Pennsylvania’s rules regarding how employers pay tipped workers will be voted on by the state Independent Regulatory Review Commission during a meeting next month. 

The Pennsylvania Department of Labor and Industry (L&I) announced this week that it submitted its final-form regulations to update Pennsylvania’s Minimum Wage Act. 

The changes would modernize guardrails to protect tipped workers and ensure consistency for employers, said L&I Secretary Jennifer Berrier. 

“The world of work has changed significantly since these regulations first went into effect in 1977, but tipped workers remain a sizeable and critical segment of Pennsylvania’s workforce,” said Berrier. “They are the only workers whose take-home pay ultimately depends on the generosity of their customers and not the obligation of their employer.” 

The final-form regulation covers five areas for tipped workers, including: 

  • An increase to the amount in tips an employee must receive monthly from $30 to $135 before an employer can reduce their hourly pay from $7.25 per hour to as low as $2.83 per hour. 
  • A tip credit given to employers under certain conditions, including that the employee spends at least 80% of their time on duties that directly generate tips. 
  • Tip pooling among employees that would exclude managers, supervisors and business owners in most cases. 
  • A prohibition on employers deducting credit card and other non-cash payment processing transaction fees from an employee’s tip left with a credit card or other non-cash method of payment. 
  • A requirement for employers to clarify that automatic service charges are not gratuities for tipped employees. 

If the IRRC approves the regulation during its March 21st meeting, it will then be submitted to the Office of Attorney General. Upon its approval by the office, it will be published in the Pennsylvania Bulletin. 

The regulation changes fall in line with Gov. Tom Wolf’s broader work protection agenda, which has seen the governor push legislation to increase Pennsylvania’s minimum wage, paid sick leave and more. 

Senators will propose tax credits bill to address labor shortage

To address the persistent labor shortage in Pennsylvania, state Sens. Ryan Aument and John Yudichak announced that they will soon introduce a bill to create a Small Business Workforce Tax Credit. 

Aument, whose district is in Lancaster County, and Yurdichak, who serves Carbon and Luzerne counties, made their intentions known in a Senate co-sponsorship memorandum dated Feb. 10. 

The aim of the tax credit, they explained, is to incentivize hiring by small businesses for “the purpose of successfully drawing our citizenry back to work.”  

Under the proposed legislation, small businesses will reduce the amount of state taxes they owe if they’re able to boost employment numbers compared to the year before.  

They would qualify for a tax credit if they had 50 or fewer employees as of Dec. 31, 2019, and experienced at least a 25% decrease in income tax gross receipts from the second quarter of 2019 to the second quarter of 2020.  

The memorandum, addressed to Aument and Yudichak’s fellow senators, asks their colleagues to co-sponsor the bill.  

It noted that 50% of restaurant operators in the full-service, quick service and fast-casual segments expect recruiting and keeping employees to be their major challenge this year, according to the National Restaurant Association. 

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