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CV3 Small Business Grant Policy and Procedure Handbook v2 2.22.2022 CDBG-CV SMALL BUSINESS GRANT PROGRAM Policies and Procedures Manual City of Northampton Office of Planning and Sustainability SMALL BUSINESS GRANT PROGRAM POLICIES & PROCEDURES FOR CDBG-CV FUNDS What is the purpose of the City of Northampton Small Business Grant (SBG) Program? The COVID-19 pandemic has economically damaged small businesses everywhere including in Northampton, causing layoffs and closures. The City of Northampton has received $266,402 in special Community Development Block Grants funds from the US Department of Housing and Urban Development under the “Coronavirus Aid, Relief, and Economic Security Act’’ (CARES Act) for preventing, preparing for, and responding to the coronavirus (COVID-19). The Northampton Office of Planning and Sustainability, has created the SBG Program to provide grants to Microenterprise Businesses (employ 5 people or less including the owner) to help them continue to operate. Must businesses be located in Northampton to be eligible for SBG Funds? Yes. There must be a brick-and-mortar business location in Northampton. What is the eligible business for SBG Funds? Low Moderate Income (LMI) Microenterprises Northampton for-profit businesses with five or fewer employees INCLUDING the business owner. How does an LMI Microenterprise qualify? 1. The microenterprise has a low-moderate income owner. A microenterprise that is owned by a low-moderate income (LMI) owner may qualify for a grant if the owner is LMI based on household size and income limits, using the “HUD 2020 Income Guidelines.” The owner will initially indicate the number of persons (related or not) that reside in owner’s household and the combined annual gross income in the household pursuant to the table below, based on the most current Adjusted HOME Income Limits from HUD (2020 here). However, owner household income will have to be verified as per paragraph 2 below. Number of persons in household With gross annual income not to exceed: Number of persons in household With gross annual income no to exceed: 1 $47,850 5 $73,800 2 $54,650 6 $79,250 3 $61,500 7 $84,700 4 $68,300 8 $90,200 2. LMI owners must provide self-certify household income for all household members 18+ such as the most recent tax returns, profit & loss reports detailing payments to owners, and similar documents. The Office of Planning & Sustainability will rely on Annual Income as defined in accordance with 24 CFR Part 5.609. For Microenterprise Business owners who exceed the 80% LMI Limits Business owners who exceed the 80% LMI threshold are still eligible for SBG Funds, however, additional requirements are necessary for the receipt of funds. The business owner must certify and track LMI job creation and/or retention National Objective. Under this objective, the business must lead to the creation or retention of full-time-equivalent (FTE) permanent jobs, at least 51 percent of which will be available to or held by LMI persons. Businesses will be required to report job creation or retention of FTE jobs to the Office of Planning and Sustainability for 3 years from the date of the signed grant agreement. Requirements for Job Creation or Retention Applicants A main criterion of the CDBG-CV Small Business Grant program is that the businesses being assisted must be able to accurately document that certain jobs they will retain and create will be for persons in low- and moderate-income households. Low/Moderate Income Jobs Description There is a two-part test to determine if a job can be counted as a Low/Moderate Income Job (LMI Job) for the purpose of this grant. 1. The job does not require any education requirements beyond high school or required any specialized job training prior to employment. 2. The household income of the person retained or hired by the business is not above the HUD (Department of Housing and Urban Development) household limits for their particular family size. LMI Jobs are determined not by the pay rate of the particular job, but by the actual household income of the person who has or obtains the job. For example, two people employed in the same job title, and paid the same rate, but with different household incomes, can mean that one position may count as an LMI Job and another position will not be considered an LMI Job if the household income is above the HUD allowed limits. Job Retainage/Job Creation A retained job is a job position that was filled by someone as of March 1, 2020 and that person is still employed (whether FT or PT) or if the person is furloughed or unemployed, that person will be rehired. If you are unsure whether someone who is furloughed or unemployed will accept re-employment, you can still count the job as being retained as long as you intend to offer them the same job position at similar hours. A created job is a job position that did not exist as of March 1, 2020 or a job that will be filled by a person not previously employed by the business. Documenting LMI Jobs Retained/Created For jobs that are being retained, employees will complete a self-certification indicating the number of persons in the household and the income category that they fall into. For jobs that are to be created, the business would have to have documentation that the job was filled by an LMI person (through the use of the following employee self-certification). If the job was not filled by an LMI person, the business would have to document that it made the job opening available to such LMI persons. An employee can also be considered as filing an LMI Job if the address in which they live is located in a low-income census tract, regardless of their household income. City of Northampton Office of Planning & Sustainability will help a business owner determine how many employees might qualify through this criterion. Each business would have to document that at least 51% of jobs retained or created with CDBG-CV assistance are for LMI jobs, so the City will want to ensure its providing fund ing to businesses that will easily be able to achieve this level. Below is a sample of the self-certification form questions that retained or new employees would complete to document their household income level along with demographic information about race and ethnicity. An example of the certification form can be found in Appendix A. What can SBG funds be used for? SBG funds awarded by the Office of Planning & Sustainability may be used to pay the commercial rent/lease/mortgage, utilities costs, professional services, or supplies. The applicant’s assisted business will be required to submit copies of paid checks and invoices for reimbursement of award. Businesses may generally apply for assistance only once but this policy may change depending upon factors such as whether sufficient funds remain after initial allocations and whether the City receives additional funds from HUD for COVID-19 related purposes. SBG funds are to pay for reimbursement of expenses incurred prior to date of execution of the agreement to be entered into between the City and SBG applicants. SBG funds may not be used to pay arrearages or amounts past due for commercial lease/rent/mortgage or utilities, late fees or penalties under any circumstances, or invoices paid prior to the date of the signed agreement. Do businesses have to pay back SBG funds to Northampton? No. Such funds if used for eligible costs do NOT have to be repaid as they are grants. What is the maximum grant allowed? The maximum grant for a low-moderate income microenterprise is $5,000. When can businesses apply for the SBG funds? Applications will be available from February 23, 2022 9:00 AM through March 31, 2022, 11:59 PM. Only completed applications submitted with ALL required supporting documents will be considered for funds; partial or incomplete submittals will not be reviewed for eligibility. What types of businesses are ineligible for SBG funds? Gun shops, pawn shops, cannabis businesses, franchises of national or regional chains, social clubs, home-based businesses, and adult entertainment businesses. What other factors must Office of Planning & Sustainability establish via application, documentation or records? 1. That the business has experienced a measurable loss of revenue due to COVID -19 as documented through weekly or monthly sales or income documentation. 2. That the business has less than $1,000,000 in gross annual receipts as through profit and loss statement. 3. That the business can establish through acceptable documentation that it’s been in operation as of September 24, 2019; at least six months prior to March 24, 2020 when Governor Baker ordered all but essential businesses closed. What is meant by avoidance of “Duplication of Benefits”? Under the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), the City must ensure that it prevents the “duplication of benefits” when u sing CDBG-CV funds, such as those used by the City under its SBG Program to assist small businesses impacted by COVID-19. Further HUD guidance is forthcoming and will be summarized here within a reasonable time after receipt of such guidance by the City. Essentially, duplication of benefits occurs when a person, household, business, or other entity receives assistance from multiple sources for the same purpose and the total assistance received for that purpose is more than the total need. Example: if a grantee receives Northampton SBG funds in the amount of $2000 per month for September, October, and November, and the business receives $2000 in other funds for these same months, this is a duplication of benefits. Each applicant will have to sign an affidavit that it will not apply for or accept other federal, state, local or private loans or grants or other assistance for the same purposes for which Northampton SBG funds will be used or in excess of total costs for that same purpose. The Duplication of Benefits Affidavit is attached in Appendix B. How does a business obtain SBG funds? 1. An applicant must complete the required SBG funding application and submit ALL required To complete the application online register for the application: https://portal.neighborlysoftware.com/northamptonma/Participant 2. Select “Microenterprise Assistance Program” 3. Complete application and attach required documentation. Applicants will provide an electronic signature within the application to submit. 4. The applicant will be required to sign, under penalty of perjury, an AFFIDAVIT stating the the applicant has not accepted/will not accept other federal, state, or local loans/grants for t he same purpose for which the business will receive SBG funds from the City. Other fund sources include, but are not limited to, SBA Disaster Loans and the Paycheck Protection Program (PPP). Applicants must also assert that there are no outstanding state or local tax liens or legal judgements. Finally, the AFFIDAVIT requires that if the business does so accept such other assistance the business will immediately notify the Office of Planning & Sustainability and may be required to reimburse the City some or all SBG funds. 5. Once submitted, Office of Planning & Sustainability will review applications and required supporting documents for completeness. Office of Planning & Sustainability staff will contact you if to obtain any missing documents, which you must send as soon as possible as only complete application packages will be reviewed for grant eligibility. 6. Microenterprise assistance will be limited to a cost reasonableness review. 7. Incomplete application packages (e.g, incomplete application form, failure to submit ALL required supporting documents) WILL NOT be accepted by Office of Planning & Sustainability A business cannot reserve its place in the application queue by submitting a partial or incomplete application. 8. The Office of Planning & Sustainability will review the completed application package and based on it and any required underwriting analysis will either accept or deny the application and will notify applicant by email. If an application is denied, the Office of Planning & Sustainability will state the reason why. 9. The City will provide the applicant with an executed copy of the Agreement. The Office of Planning & Sustainability will notify the applicant that invoices and other acceptable documents asking for grant funds may be submitted. What documents must an SBG applicant submit with the application? Documents required to be submitted with a SBG Application include: 1. DBA License/Certificate from City of Northampton 2. Signed IRS Form W9 The Office of Planning & Sustainability reserves the right to ask for further information under these Policies and Procedures in order to approve applications and/or process payments, including but not limited to, paystubs, cancelled checks, receipts, or copie s of bank statements. City reserves right to amend Policies and Procedures The City cannot foresee all contingencies and therefore reserves the right to make exceptions to these Policies and Procedures. Contact Information Keith Benoit, Community Development Planner kbenoit@northamptonma.gov 413-587-1288 Appendix A SAMPLE EMPLOYEE JOB CERTIFICATION DATE: EMPLOYEE: JOB TITLE: Please provide the information requested on this form so that we can verify to the City of Northampton Office of Planning & Sustainability that your employment here is achieving the goals of the COVID-19 Small Business Grant Assistance Program. The information will be placed in your confidential personnel file and is available to only a limited number of company officials. This information is also subject to verification by the Office of Planning & Sustainability and representatives of the United States Department of Housing and Community Development. Thank you. STEP 1: CIRCLE THE SIZE OF YOUR FAMILY AND FAMILY INCOME. COUNT YOURSELF AND ALL FAMILY MEMBERS LIVING AT HOME. CIRCLE FAMILY SIZE CIRCLE INCOME Family Size Low Income 80% Very Low Income 50% Extremely Low Income 30% 1 47,850 29,900 17,950 2 54,650 34,200 20,500 3 61,500 38,450 23,050 4 68,300 42,700 26,200 5 73,800 46,150 30,680 6 79,250 49,550 35,160 7 81,700 52,950 39,640 8 90,200 56,400 44,120 4/1/2020 STEP 2: PLEASE CIRCLE ABOVE OR BELOW IN THE FOLLOWING QUESTION: CURRENT EMPLOYMENT, WAS YOUR FAMILY'S TOTAL ANNUAL INCOME ABOVE OR BELOW THE AMOUNT FOR YOUR FAMILY SIZE AS STATED ABOVE STEP 3: A. PLEASE INDICATE YOUR RACIAL GROUP Ethnic Category Total Persons #Also Hispanic White Black/African American Asian American Indian/Alaskan Native Native Hawaiian/Other Pacific Islander American Indian/Alaskan Native and White Asian and White Black/African American and White American Indian/Alaskan Native and Black/African American Other Individuals Reporting more than One Race B. SEX: MALE FEMALE C. ARE YOU A FEMALE HEAD OF HOUSEHOLD? YES NO D. ARE YOU A PERSON WITH A DISABILITY? YES NO STEP 4: PLEASE COMPLETE. NAME: SIGNATURE: DATE: THANK YOU FOR YOUR HELP! Appendix B City of Northampton Duplication of Benefits Affidavit Business Name: DUNS Number: Part 1 This section identifies any sources of funds that the business has applied for or received as a result of the COVID-19 Global Health Crisis other than insurance. Sources of funds include but are not limited to: Federal, state and local loan/grant programs, private or bank loans, nonprofit donations or loans. Please mark any of the boxes below which apply to your business regarding any prior assistance. I HAVE NOT applied for or received funding assistance from Federal, state, local programs or from other sources. I HAVE received funding assistance from the following programs to assist in responding to the impact of the Covid-19 Global Health Crisis: 1 Lender: Assistance Program Name: Amount Requested: Amount Received: Date Received: How funds were used (ie. Salaries including coverage dates, supplies, professional services, etc.) 2 Lender: Assistance Program Name: Amount Requested: Amount Received: Date Received: How funds were used (ie. Salaries including coverage dates, supplies, professional services, etc.) 3 Lender: Assistance Program Name: Amount Requested: Amount Received: Date Received: How funds were used (ie. Salaries including coverage dates, supplies, professional services, etc.) I HAVE APPLIED FOR funding assistance, and my application is PENDING from the following programs: 1 Lender: Assistance Program Name: Amount Requested: Date Requested: How funds will be used (ie. Salaries including coverage dates, supplies, professional services, etc.) 2 Lender: Assistance Program Name: Amount Requested: Date Requested: How funds were used (ie. Salaries including coverage dates, supplies, professional services, etc.) 3 Lender: Assistance Program Name: Amount Requested: Date Received: How funds will be used (ie. Salaries including coverage dates, supplies, professional services, etc.) Part 2: CERTIFICATION As a recipient of a CDBG-CV funds under the applicable Agreement, I assert that: 1. I will not apply for more funding than needed for the eligible activity or project for which CDBG-CV funds are provided. For example, if I have $100 available from another source CDBG-CV funds are provided. towards each monthly gas bill and I am applying for SBG funds to pay for my total monthly gas bill of $500, SBG funds will be limited to $400 per month for up to three months. 2. I understand that duplication of benefits (DOB) are prohibited under the federal Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act). 3. I will immediately report to the City of Medford’s Office of Community Development if I apply for or accept any financial assistance from other funding sources (federal, state, local or private) that constitute a duplication of benefits received under the Microenterprise and Small Business Relief Grant Programs. 4. I acknowledge that any duplication of funds may either have to be paid back to the City or that the grant funds may be reduced by a corresponding amount. 5. I understand that this affidavit is appended to and part of the applicable Agreement that the Business Applicant executes with the City for CDBG-CV funds and is a condition of the receipt of such funds. I certify that the information that I have provided above is an accurate and complete disclosure. I understand that to perjure myself in order to obtain assistance is a fraudulent offense for which I can be prosecuted. Date: Business Applicant Signature: Business Applicant Printed Name: