Lancaster city small businesses struggling due to the COVID-19 pandemic will soon have access to a new fund with $1.45 million in available loans and grants.

Launching this month, the Lancaster City Small Business Emergency Fund will offer assistance in the form of low-interest loans or grants to city businesses that have annual revenues less than $1 million.

During a special meeting Thursday, Lancaster City Council agreed to contribute $250,000 in loan capital to the new fund which will be added to $200,000 of loan capital coming from Assets as well as $800,000 from Community First Fund, which will administer the program.

Fulton Bank, Ferree Foundation and the High Foundation are initially providing a combined $200,000 for grants while EnCourage Lancaster, an advocacy group formed supporting small business formed in response to the COVID-19 crisis, also plans to contribute some proceeds from its own fundraising.

For the city, the $250,000 will come from its Enterprise Loan Program, also known as the Small Business Loan Program. Started decades ago using repayments from a discontinued state economic development initiative, it offers low-interest financing “to stimulate business growth, job retention and job creation,” according to a city summary.

How it works

Through the Lancaster City Small Business Emergency fund, businesses will be able to receive five-year loans of up to $50,000. Loan repayments will be deferred for the first six months and they will be interest-free for the first year. After that, the interest rate will be 4%.

Businesses with under $500,000 in annual revenue can apply for a grant or a loan while businesses with between $500,000 and $1 million in annual revenue will only be eligible for a loan.

Applications will open at the end of April and remain open for about 10 days. Once the application period closes, all submissions will be considered equally. Selection criteria include longevity of business, historic profitability, economic and community impact, severity of need, number of employees and businesses impact on the streetscape of Lancaster city.

More information is available at

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