CDBG Small Business Loan Program

Purpose

The City of Morganton Community Development Block Grant (CDBG) Small Business Loan Program (SBLP) is a competitive, low interest loan program offering between $5,000 and $30,000 for new or expanding small businesses in the City limits of Morganton that employ individuals that meet low to moderate-income criteria. Funds may be used by small business owners for a variety of purposes to encourage small business entrepreneurship.

The application deadline is August 30, 2011. For more information about this program, contact Lisa Helton, Program Administrator (828) 485-4281.
 2011 Small Business Loan Application

Funding

The SBLP is funded through a portion of the City of Morganton's annual Community Development Block Grant (CDBG) Entitlement Program, provided by the U.S. Department of Housing and Urban Development (HUD). The loan will be set at a 4% interest rate for five years with a monthly payment due by the first of each month to the City of Morganton. If the business maintains a good standing on the loan and completes its original business plan, 50% of the principal will be forgiven after 5 years.

Eligibility

• Assisted business owners must show experience in similar business ventures or provide evidence of certification through the community college or similar institution.
• Only businesses that primarily employ people with low to moderate -incomes are eligible for funding. Low to moderate-incomes eligibility is determined by using household income guidelines established annually by HUD. (51% of the total new employees of the business must fall within the low to moderate-income range.
• Home-based businesses or occupations may be eligible for SBLP funding, as long as the activities of the business are eligible under existing city ordinances and regulations and have potential to impact or benefit the entire city.
• SBLP funds are available to qualified businesses citywide, but priority will be given to businesses that comply with City Long term planning goals identified through the Adopted Mission 2030 plan, or located within target areas where other city programs are taking place such as redevelopment areas, downtown areas or areas in need of reinvestment such as DIG Zones or Urban Progress Zones.
• Applicant must be a citizen of the United States and proposed business must be located with the city limits of Morganton.

Eligible Uses

CDBG funds may be used for a variety of activities, some of which include:

• Purchase of land or buildings
• Building construction
• Building renovation
• Up-fit tenant improvements
• Purchase capital equipment to conduct the business
• Purchase of inventory necessary for project start-up
• Working Capital

Ineligible Uses

The following activities may not be assisted with CDBG funds:

• Governmental uses or expenses
• Political activities
• Personal property

Application Process

Applicants must complete and submit a SBLP funding application to the City's Development and Design Department. Applications will be reviewed by the City's Small Business Loan Program Advisory Council, a group appointed by the City Council to review and approve the SBLP funded programs and activities. The Advisory Council will meet after the application is received and review the application. SBLP applicant finalist will be asked to present their request for funding before the Advisory Council prior to any funding decisions.

Review Process

The Advisory Council will convene to make funding decisions within 30 days after reviewing the SBLP applications and hearing presentation, when appropriate. Applicants will be notified of their application's approval or rejection and funding amount, by the Development and Design staff. The terms of the CDBG SBLP loans and payment amounts will be determined on a case-by-case basis, in consultation with Development & Design staff. CDBG loans will require a collateral or personal guarantee, deemed appropriate by the advisory council. Further financial information may be required after approval to determine loan repayment terms.

HUD Income limits per household for Hickory, Morganton, Lenoir MSA:

1 person = < $29,400

2 persons = < $33,600

3 persons = < $37,800

4 persons = < $42,000

5 persons = < $45,350

6 person = < $48,700

7 persons = < $52,100

8 persons = < $55,450

Applications should be submitted to:

City of Morganton Development & Design Department
Attention: Lisa Helton, Program Administrator (828) 485-4281
PO Box 3448, Morganton NC 28680-3448