This
page provides background information and web page links for
federal government and Massachusetts state government
funding sources grouped in five categories:
- Economic
Development Planning
- Project
Planning and Feasibility Analysis
- Small
Business Financing
- Real
Estate Development
- Infrastructure
Improvements
Economic
Development Planning
Federal
Government Sources
- United
States Economic Development Administration Planning
Grants fund up to 75% of the costs of preparing an
overall economic development strategy or plan for a
city, region or state with the balance of funds provided
by a local match. The maximum grant amount is $200,000.
Planning grants also can be used for program development
planning. http://www.doc.gov/eda/text/tplannin.htm
- U.S.
Environmental Protection Agency Sustainable Development
Challenge Grant Program http://www.epa.gov/ecocommunity/sdcg
provides challenge grants to communities to develop
place-based approaches to sustainable development that
links environmental protection, economic prosperity, and
community well-being, which can be replicated in other
communities. Grants are available at two funding levels:
(1) $30,000 to $100,000 and (2) $100,001 to $250,000. An
applicant must provide a minimum 20% match from
non-federal sources. Project categories include
community revitalization and redevelopment,
comprehensive planning for sustainable growth,
community/local government tools for sustainability
along with other categories.
- The
Federal Highway Administration's Transportation and
Community System Preservation (TCSP) Program http://www.fhwa.dot.gov/tea21/factsheets/t-c-sp.htm
(authorized under the federal Transportation Equity Act
for the 21st Century, known as TEA-21) funds planning
and implementation activities for transportation
strategies that:
- improve
the efficiency of the transportation system
- reduce
environmental impacts of transportation
- reduce
the need for future costly public infrastructure
investments
- ensure
efficient access to jobs, services and centers of
trade
- Examine
or identify strategies to encourage private
development patterns that encourage these goals.
Commonwealth
of Massachusetts Sources
- Massachusetts
Municipal Incentive Grant (MIG) Program helps local
governments with planning and management, as well as
training of local officials. MIG grants are targeted to
planning and municipal management projects and can be
used for a variety of planning studies, including growth
management and economic development strategies. Grants
can be for up to $35,000. No match is required. Grants
are awarded via an annual RFP issued by DHCD each spring
and contingent upon annual legislative appropriations. http://www.state.ma.us/dhcd/components/dcs/programs/migs/default.htm
Project
Planning and Feasibility Analysis
Federal
Government Sources
- United
States Economic Development Administration Technical
Assistance Grants fund up to 75% of the costs to initiate design, plan
and implement economic development projects and
programs. The maximum grant is $25,000. This program is
a good source to fund early stage soft costs and
"start-up" costs to plan and begin
implementation on projects and programs. Uses can
include: feasibility studies for development projects,
research and planning to establish a new program or
pursue innovative economic development idea or approach.
Commonwealth
of Massachusetts Sources
- Municipal
Incentive Grant (MIG) Program helps local
governments with planning, management and training of
local officials. MIG grants are targeted to planning and
municipal management projects and can be used for a
variety of planning studies, including growth management
and economic development strategies. Grants can be for
up to $35,000. No match is required. Grants are awarded
via an annual RFP issued by DHCD each spring. Funding is
contingent on annual legislative appropriations. http://www.state.ma.us/dhcd/components/dcs/programs/migs/default.htm
- MassDevelopment
Predevelopment Assistance Program http://www.massdevelopment.com
provides matching grants from $5,000 to $25,000 for
environmental testing, market or feasibility analysis,
preliminary architectural and engineering work, and
other services needed to evaluate or prepare a project
for development. To be eligible, a project must be
within an Economic Target Area, have a sound concept and
have the potential to generate significant economic
benefits. A sponsor must match at least 50% of the
funding. The grants are recovered if the project
proceeds and secures permanent financing from
MassDevelopment or another source.
Small
Business Financing
Federal
Government Sources
- Small
Business Administration (SBA) is the largest federal
economic program and the funding source targeted to
small businesses. Banks deliver some SBA programs while
other programs are delivered by a special purpose entity
licensed by or funded by the SBA. The main SBA program
delivered through banks is:
- SBA
7a loan guarantee program http://www.sba.gov/financing/fr7aloan.html
is the SBA's largest program, providing loan
guarantees of up to $750,000 on private bank loans
for working capital or fixed assets or both.
Guarantees are for 70-90% of the loan and are
provided to the bank or financial institution. Loan
interest rates can be as high as prime + 2.75% and
terms up to 10 years on working capital and 25 years
on fixed assets are allowed. The SBA has variations
on this program to improve its use and
accessibility, which include:
Low
Doc program http://www.sba.gov/financing/frlowdoc.html
- for loans of $100,000 or less where the SBA receives a
two-page application and bank's underwriting analysis to
review.
CAPLines
loan program http://www.sba.gov/financing/frcaplines.html
- for short term cyclical line of credit financing.
Export
Working Capital Loan Guarantee Program http://www.sba.gov/financing/frexport.html
provides short-term working capital guarantees for up to
$750,000 and up to 90% of a working capital loan for
export services.
Four
main programs are delivered by SBA approved intermediaries
are:
- SBA
504 Program http://www.sba.gov/financing/frcdc504.html
is a large and growing program that provides long term
fixed-rate financing for fixed asset investments by
companies. There are three pieces to 504 financing:
(1) 50% - senior mortgage by a private bank, (2) 40% -
SBA guaranteed subordinated debenture originated
through a Certified Development Company (CDC) and (3)
10% - firm equity contribution. These loans are
originated by SBA approved Certified Development
Corporations (CDCs) and then approved by the SBA
district office. A CDC is a non-profit corporation
that has a minimum of 25 members from the local small
business and lending community. It can operate
statewide, citywide or on a community basis. It can be
a stand-alone organization or it can be a subsidiary
of another organization. The CDC services the loan for
the SBA and collects fees for both originating and
servicing loans.
- SBA
Microloan Demonstration Program, http://www.sba.gov/financing/frmicro.html
authorized in the FY1992 Appropriations Act, provides
grants to non-profit corporations to operate
micro-enterprise loan funds and to provide technical
assistance. A 15% local match is required to fund a
loan loss reserve for the loan fund. Over 100
non-profit lenders have been funded through this
program with grants averaging approximately $400,000.
The average loan under this program is approximately
$10,000 with an average interest rate of 10%.
- Small
Business Investment Companies (SBIC) http://www.sba.gov/INV
The SBA licenses private companies or partnerships
that provide debt and equity investments to
high-growth small business enterprises. SBICs and
Special SBICs, which target economically and socially
disadvantaged businesses, can leverage their private
capital by up to 400% through below-market government
guaranteed or owned securities.
- Surety
Bond Guarantee Program http://www.sba.gov/osg/
is delivered through 15 surety bond companies provides
small contractors and service firms the surety bonds
that they need to be eligible for public construction
contracts and public contracting.
- US
Economic Development Administration Economic Adjustment
Assistance Program (Title IX) http://www.doc.gov/eda/text/teconadj.htm
funds programs and projects that help alleviate either
long term economic distress or sudden and severe
economic distress in a community. Grants can be for up
to 75% of project costs. This program has funded many
Revolving Loan Funds that provide small business
financing, but also can support other programs to
generate new economic development activity or address a
cause of economic distress, e.g., the development and
operation of a small business incubator.
- Community
Development Finance Institutions Fund http://www.treas.gov/cdfi
is a unit of the Treasury Department that certifies
organizations as eligible CDFIs and provides financial
assistance under four programs. An eligible CDFI must
have a primary mission of promoting community
development, serve a targeted area or population,
provide development services in conjunction with
financing, and maintain accountability to residents of a
target area or target population. A CDFI cannot be a
governmental agency and can only be a bank entity if
both the parent and affiliates collectively meet the
CDFI requirements. CDFI funding programs include: (1)
Core Component awards provide investment capital via
grants, deposits, loans and equity investments and
require an equal match of investment capital required.
FY1999 Core awards totaling $64 million were made to 65
organizations. (2) Intermediary awards provide grants,
loans, deposits, or equity investments to organizations
that support CDFIs with financing and/or technical
assistance. FY1999 Intermediary Component awards
totaling $8.1 million were made to 4 organizations. (3)
Technical Assistant Component awards provide technical
assistance grants to enhance CDFI capacity. FY1999
Technical Assistant award totaling $4 million were made
to 98 organizations. (4) Bank Enterprise awards provide
credits against banks' FDIC insurance fees for increased
community development lending activities. FY1999 Bank
Enterprise awards totaling $36 million were made to 88
banks.
- Office
of Community Services Urban and Rural Community
Economic Development Program http://www.acf.dhhs.gov/programs/ocs
is a small program (FY1999 appropriation of $30 million)
within the Department of Health and Human Services this
is targeted to neighborhood-based organizations for
economic development in low-income communities. This
program provides grants to non-profit community based
organizations for economic development activities that
generate jobs, business ownership opportunities, or
other benefits for low income persons. Grants can
finance a development project, provide financing for a
business (loan or equity) or fund job training
activities that directly train low income persons for
jobs skills need to fill jobs in a granted-support
project. The maximum grant is $750,00, with most grants
in the $500,000 range. Funds are awarded through an
annual funding competition.
- HUD
Section 108 Financing Program. http://www.hud.gov/cpd/programs.html
Under this program, a community can secure debt
financing to fund an economic development project that
advances one of the CDBG program's national objectives
(benefiting low or moderate income families, aiding in
the prevention or elimination of blight, or meeting a
critical community need). HUD funds the Section 108
project by issuing notes secured by the city's future
CDBG grants and guaranteed by HUD. These notes are
repaid from the project or company's revenue, but if the
project defaults, HUD then draws upon the city's annual
CDBG allocation to repay the notes. The City pledges a
portion of its future CDBG funds to borrow money needed
to finance a project today. Interest is paid to HUD
equal to the interest note rate for the HUD guaranteed
note. A city can add an additional spread on this rate
and charge the project or business a higher interest
rate. Repayment periods can be up to 20 years but HUD is
required to seek additional collateral beyond CDBG funds
for loans with terms of 10 years or longer (e.g., liens
of real estate, pledges of program income, etc.).
- HUD
Economic Development Initiative (EDI). http://www.hud.gov/progdesc/edi.cfm
In the past several years, HUD has received
appropriations for this program to subsidize projects
financed with Section 108 loans. While some of these
funds are allocated to empowerment zone and enterprise
communities, there has been close to $100 million in EDI
grants available to other communities in recent years.
An EDI grant can be used by the recipient community as
either a direct grant to the project, to reduce the
interest rate on the Section 108 loan, or to provide a
debt service reserve, guarantee, or other credit
enhancement for the Section 108 loan
Commonwealth
of Massachusetts Sources
- MassDevelopment
http://www.massdevelopment.com
manages several business finance programs including
tax-exempt bond financing, mortgage insurance, export
financing, a tax-exempt lease program and an Emerging
Technology fund.
- Massachusetts
Business Development Corporation http://www.mass-business.com
provides private business financing, including equity
investments, loans and guarantees from $50,000 to $1
million for growing companies throughout the state. MBDC
operates 8 financing programs including: Middle Market
Investment Loans up to $1 million for equipment, working
capital, real estate and other business uses, Mass
Certified Development Corporation which provides
low-cost, fixed-rate SBA 504 loans for real estate or
equipment purchases range up to $3 million,
Massachusetts Community Investment Group for minority
and woman-owned businesses, non-profits, or companies in
economically disadvantaged areas, the Mezzanine Capital
Fund which provides up to $500,000 in subordinated debt
for growing businesses, and the Recycling Loan Fund
which provides loans up to $300,000 for any size
business in Massachusetts which processes non-hazardous
waste materials.
- Economic
Stabilization Trust http://www.commcorp.org/BES/Trust/default.htm
provides technical assistance, direct loans and loan
guaranties to help small and medium-sized manufacturing
businesses meet the challenges of modernization and
competitiveness in the global marketplace.
- Massachusetts
Community Development Finance Corporation (CDFC)
operates multiple investment funds targeted to
low-income areas and minority-owned businesses. CDFC
provides equity and debt to high growth businesses
through its Venture Fund and Commonwealth Enterprise
Fund (a SBA-licensed Special Small Business Investment
Company), assists minority- and women-owned contractors
through its Collateral and Technical Assistance Loan
Program, provides short and medium debt to CDC-developed
residential, commercial and industrial real estate
projects through its Real Estate Fund, and provides
loans, loan guarantees and technical assistance to small
minority-owned businesses with the Urban Initiatives
Fund.
- Massachusetts
Technology Development Corporation http://www.mtdc.com
is a state owned venture capital firm that provides
start-up and expansion capital for early-stage
technology companies operating in the Commonwealth of
Massachusetts.
- Massachusetts
Community Capital Fund is a set-aside of small
cities CDBG funds used by the state Department of
Housing and Community Development to provide flexible
debt financing to private businesses in non-CDBG
entitlement communities. Business projects must meet
CDBG requirements, demonstrate a clear need for MCCF
funding, create at least one quality job per 20,000 of
MCCF funds, and demonstrate sufficient cash flow to
repay the loan. The minimum loan in $100,000 and the
maximum amount is $490,000. http://www.state.ma.us/dhcd/components/dcs/cdbg/mccf.htm
- Ready
Resource Program http://www.state.ma.us/dhcd/components/dcs/cdbg/rrf.htm
is a set-aside of small cities CDBG funds used by the
state Department of Housing and Community Development to
fund economic development projects in non-CDBG
entitlement communities. The Ready Resource Fund
provides grants to small cities for a wide range of
economic development projects or activities including
small business technical assistance, small business
lending, commercial and industrial real estate
development, and infrastructure. Projects must comply
with CDBG requirements to be eligible. The maximum grant
amount is $390,000.
Real
Estate Development
Federal
Government Sources
See Office
of Community Services, HUD
108 Program and HUD
Economic Development Initiative under Small Business
Financing
- Economic
Development Administration Public Works Grants http://www.doc.gov/eda/text/tpwprog.htm
fund infrastructure development, public works
development and construction costs for projects that
will generate long term private sector employment in
distressed areas. Grants cover up to 50% of total costs
for the project. Potential projects can include
industrial park development, port infrastructure
development, public improvements need for a private
investment project (e.g., road improvements, utility
upgrades, etc.) and commercial real estate developments
with public or non-profit ownership.
- EPA's
Brownfields Economic Redevelopment Initiative http://www.epa.gov/brownfields/pilot.htm#pilot
is designed to empower states, communities, and other
stakeholders in economic redevelopment to work together
in a timely manner to prevent, assess, safely clean up,
and reuse brownfields. A brownfield is a site, or
portion thereof, that has actual or perceived
contamination and an active potential for redevelopment
or reuse. EPA is funding: assessment demonstration pilot
programs (each funded up to $200,000 over two years), to
assess brownfields sites and to test cleanup and
redevelopment models; job training pilot programs (each
funded up to $200,000 over two years), to provide
training for residents of communities affected by
brownfields to facilitate cleanup of brownfields sites
and prepare trainees for future employment in the
environmental field; and, cleanup revolving loan fund
programs (each funded up to $500,000 over five years) to
capitalize loan funds to make loans for the
environmental cleanup of brownfields. These pilot
programs are intended to provide EPA, states, tribes,
municipalities, and communities with useful information
and strategies as they continue to seek new methods to
promote a unified approach to site assessment,
environmental cleanup, and redevelopment.
- Brownfields
Cleanup Revolving Loan Fund Pilot. http://www.epa.gov/brownfields/rlflst.htm
U.S. EPA's Brownfields Cleanup Revolving Loan Fund Pilot
(BCRLF) enables municipalities to capitalize revolving
loan funds for the cleanup and redevelopment of
brownfield sites.
- Brownfields
Showcase Communities http://www.epa.gov/brownfields/showcase.htm
are designations awarded by the U.S. Environmental
Protection Agency (U.S. EPA) that attract technical,
financial and other assistance from Federal agencies
participating in the Brownfields National Partnership.
Each showcase community is assigned one federal employee
to assist with the coordination of technical and
financial support from the participating Federal
agencies. Participating agencies and programs vary for
each community depending upon the particular community's
needs and plans.
Commonwealth
of Massachusetts Sources
- MassDevelopment
Real Estate Development Loan Fund http://www.massdevelopment.com
provides loans for real estate development projects in
Economic Target Areas that generate economic development
benefits. Projects must demonstrate a need for financing
due to insufficient available funds and a commitment to
job retention/creation and community revitalization. The
loans are capped at $3 million and are charged a
competitive interest rate for a maximum term of eighteen
years.
- Massachusetts
Community Development Finance Corporation (CDFC)
provides short and medium debt to CDC-developed
residential, commercial and industrial real estate
projects through its Real Estate Fund.
- Small
Cities Community Development Block Grants. http://www.hud.gov/progdesc/cdbg-st.html
This program, administered by the state Department of
Housing and Community Development http://www.state.ma.us/dhcd/components/dcs/cdbg/default.htm
is one of the largest grant sources for non-entitlement
Massachusetts' communities. Small Cities CDBG funds can
be used to fund real estate development projects when
they further the national objectives of the program,
including the prevention or elimination of slums and
blight, benefiting low and moderate income persons, or
responding to a critical community need.
- Brownfields
Redevelopment Fund. http://www.state.ma.us/dep/bwsc/brownfld.htm
created by the Massachusetts' 1998 Brownfields Act and
administered by MassDevelopment, provides low-interest
loans and grants for site assessment and cleanup
projects that can demonstrate economic impacts in
"Economically Distressed Areas" (EDA).
Eligible applicants must be a public or not-for-profit
entities and an innocent owner, operator or third party
that is not responsible for the site's contamination.
- Ready
Resource Program http://www.state.ma.us/dhcd/components/dcs/cdbg/rrf.htm
is a set-aside of small cities CDBG funds used by the
Department of Housing and Community Development to fund
economic development projects in small cities. The Ready
Resource Fund provides grants to small cities for a wide
range of economic development projects or activities
including small business technical assistance, small
business lending, commercial and industrial real estate
development, and infrastructure. Projects must comply
with CDBG requirements to be eligible. The maximum grant
amount is $390,000.
Infrastructure
Improvements
Federal
Government Sources
- Public
Works and Development Facilities Program Grants. http://www.doc.gov/eda/text/tpwprog.htm
Public Works and Development Facilities Program Grants
are available from the U.S. Economic Development
Administration (EDA) at the U.S. Department of Commerce.
These grants help distressed communities attract new
industry, encourage business expansion, diversify local
economies, and generate long-term, private sector jobs.
Grants cannot exceed fifty percent of total project
costs and have averaged $1 million over the past three
years. They can be used for infrastructure, public
works, and construction projects.
- Transportation
and Community System Preservation (TCSP) Program,
administered by the Federal Highway Administration,
funds transportation projects and strategies that
improve the efficiency of the transportation system,
reduce environmental impacts of transportation, reduce
the need for future costly public infrastructure
investments, or ensure efficient access to jobs,
services and centers of trade. http://www.fhwa.dot.gov/tcsp/
Commonwealth
of Massachusetts Sources
- Massachusetts
Community Development Action Grants (CDAG) http://www.state.ma.us/dhcd/components/dcs/programs/default.htm
from the Massachusetts Department of Housing and
Community Development (DHCP), fund the infrastructure
component of economic development projects. The maximum
grant is $1 million. The infrastructure development must
be publicly owned but adjacent land can be privately
owned.
- Public
Works Economic Development (PWED) program,
administered by the Executive Office of Transportation
and Construction, provides grants for road projects with
economic development impacts. The average grant is $1
million but the grant can be higher if the Secretary of
Transportation determines that the project requires a
higher level of funding. PWED grants are only available
for publicly owned facilities.
- Urban
Self-Help Program. The Urban Self-Help Program,
administered by the Executive Office of Environmental
Affairs (EOEA), provides grants for preserving open
space in urban areas. These grants are based on 52 to 70
percent reimbursement of city costs, but are generally
capped at $500,000 per grant per city. Larger grants are
sometimes made for multi-year projects. There is a $4
million funding cap per year for this program.
- Ready
Resource Program http://www.state.ma.us/dhcd/components/dcs/cdbg/rrf.htm
is a set-aside of small cities CDBG funds that the state
Department of Housing and Community Development uses to
fund economic development projects in small cities. The
Ready Resource Fund provides grants to small cities for
a wide range of economic development projects or
activities including small business technical
assistance, small business lending, commercial and
industrial real estate development, and infrastructure.
Projects must comply with CDBG requirements to be
eligible. The maximum grant amount is $390,000.
- The
Department of Environmental Management http://www.state.ma.us/dem/grants.htm
has several grant programs that fund infrastructure
improvements. The largest program is Rivers and
Harbors Grant Program which provides matching grants
to fund the design and construction projects that
address problems on coastal and inland waterways, lakes
and great ponds. Projects require a 50% local match,
except dredging projects which require a 25% match.
Projects requiring less than $300,000 in state funds are
preferred. The Historic Landscape Preservation Grant
programs funds the preservation and restoration of
landscapes listed or eligible for listing on the State
or National Register of Historic Places.
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