CDBG Microenterprise Grant Program
Program Summary and Business Assistance Guidelines
The CDBG Microenterprise Grant Program is a grant program to assist small businesses. This grant was awarded to Fulton County and is being administered by the Fulton County Center for Regional Growth. Small businesses can receive grants of up to $25,000 to assist with startup or expansion costs which create jobs.
Below are general guidelines for a potential business utilizing CDBG Microenterprise Grant funding.
a. Eligible Businesses- Grants will be available only to microenterprises. A microenterprise is defined as a commercial enterprise that has (5) five or fewer FTE employees, one (1) or more of which owns the enterprise at the time of application. Projects must result in the creation afar least one PTE job. In the case where no jobs are to be created, the employer and/owner or current employee base must be low or moderate-income person as established by CDBG at the time closing.
b. Eligible Activities – Eligible activities include providing assistance to businesses that are involved in manufacturing, warehousing and distribution, agriculture, high technology, research and development and traditional and innovative small business endeavors. Retail projects will be considered if the business is located in a town, village or city’s main street.
c. Business Structure - The Microenterprise may be a sole proprietorship, partnership, limited liability company or corporation.
d. Location – The business must be located within Fulton County.
e. Feasibility - Microenterprise businesses must present a reasonable likelihood for long term viability based upon issues such as feasibility, marketability, management, competition, and capitalization.
f. Use of Funds - Grants can be used for capital assets (such as real estate, buildings, machinery and equipment) and working capital.
g. Applicant Qualifications – Applicants for financing under this program shall be a United States corporation, LLC, partnership, or sole proprietorship, be able to repay if found in default of program objectives, and possess good character and reputation and be of legal age.
h. Passive Investing Prohibited – Grant funds will not be utilized for activities that consist primarily of investing, speculation in real estate, or to primarily assist in the sale or purchase of an existing business.
i. Limits on Construction Funding - Construction, rehabilitation and renovation activities are not eligible using CDBG Microenterprise funding, as such activities would trigger Federal Labor Standards. The program will look to non-Federal funds to cover the cost of construction or renovation in those instances where such activities need to take place.
a. Grant Calculation – The minimum grant for each business will be $5,000 and the maximum will be $25,000. The grant will be calculated as follows. Each business will receive a $5,000 grant plus $10,000 for each full time equivalent job created. In addition, for any business at least 51% of the jobs created shall be low mod jobs.
b. Use of Grant Funds – Grant Funds will be provided Financing of capital assets (such as real estate, buildings, machinery and equipment) and working capital.
c. Owner Contribution – Grant recipient will provide a minimum of 10% equity in the project.
d. Timing of Grant Funds – Grant funds will be release on a pre-agreed upon schedule, where CDBG funds will be disbursed on a pro rata basis with the other financing
e. Compliance During the Regulatory Term – A formal agreement between the business and the County will be executed. Where collateral is available, this agreement will be secured by a means of a mortgage on real estate or a lien in other hard assets. This agreement will constitute the means by which the County enforces compliance with program requirements. The program will include regular periodic monitoring of each business to ensure that it is making good faith efforts to achieve employment goals and other program objectives.
3. Entrepreneurial Training Requirement
Participation in the Fulton County Center for Regional Growth (CRG) business training program will be required of all program participants and completion CRG’s entrepreneurial training Small Business Training Program. The cost of $100.00 per attendee will be an eligible expense of micro enterprise grant funds. A training program syllabus includes a general overview of business; accounting, taxes, and finance; marketing and e-commerce; and development of a business plan. ALL training sessions must be attended by the applicant in order to receive funding.
2016 Training Schedule:
- Business Basics: April 12, 2016; 6:00 p.m. – 9:00 p.m. at Fulton Montgomery Regional Chamber, 2 North Main Street, Gloversville
- Recordkeeping, Accounting, Taxes and Financing: April 19, 2016; 6:00 p.m. – 9:00 p.m. at Fulton Montgomery Regional Chamber, 2 North Main Street, Gloversville
- Marketing and Advertising: April 26, 2016; 6:00 p.m. – 9:00 p.m. at Fulton Montgomery Regional Chamber, 2 North Main Street, Gloversville
- Developing a Business Plan: May 3, 2016; 6:00 p.m. – 9:00 p.m. at Fulton Montgomery Regional Chamber, 2 North Main Street, Gloversville
4. Grant Recapture
In the event the grant recipient goes out of business or goes into defaults on the grant agreement from the date of the award up until the time of grant close-out, the grant will be subject to recapture. The amount to be returned will be based upon years of successful, legitimate operation according to the following schedule:
Default within One Year – 100% Recapture
Default within Two Years – 80% Recapture
Default within Three Years – 60% Recapture
Default within Four Years – 40% Recapture
Default within Five Years – 20% Recapture
Default After Five Years – No Recapture