Community Development Block Grant
This Commerce Program is designed to stimulate economic development activity by assisting the private sector to create or retain jobs for low and moderate income persons primarily through loans to businesses. Commerce grant funding is also available to companies for employee training and infrastructure.
The program is designed to assist businesses by making fixed-rate financing available to them at reasonable interest rates, given the risk of the project, and to provide public improvements in support of economic development activities.
Commerce funds are intended to be used in situations where a funding gap exists and alternative sources of public and private financing are not adequate. Commerce provides flexibility in interest rates and loan terms to complement conventional business financing and other federal business financing programs. CDBG funding can provide payment deferments, lower payments in the first year and interest-only payments.
The Department of Commerce Regional Development Officer (RDO) for your area can be contacted for assistance. The RDOs typically work through the local development corporation so it is usually best to contact the closest one in your area first.
Business Loan Fund
This program awards funds annually to Montana's non-metropolitan cities and towns and counties for re-lending by the local government to private business projects, which will create or retain jobs for low to moderate income families. Applications are made to the division by the local government sponsoring the project. Projects are selected for funding based on a number of criteria, and loan repayments by the assisted business are usually allowed to be retained by the local government to provide loans to other qualifying businesses within the community and for job training by businesses.
Business Infrastructure Projects
A "financing gap" must be identified and documented in the financial package submitted with the application. The application must demonstrate that other funds, including private funds from the business, are insufficient to complete the project without CDBG participation.
The must meet the same threshold requirements, demonstrate viability, include a hiring and training plan for each business assisted and meet all other appropriate requirements contained in these guidelines.
All jobs created or retained by all businesses that locate or expand as a result of the public improvement must be aggregated and tracked for one (1) year from the physical completion of the public facility and/or improvement. When the CDBG cost per FTE job is $10,000 or more, all jobs created or retained as a result of the projects impact on businesses in the service area may be aggregated to meet the national objective of benefiting low and moderate income persons. All jobs created from all businesses assisted must be counted toward the 51% benefit to low and moderate income threshold. Before submitting the application, the local government must assess current and prospective businesses that will benefit from the project. Contracts for public improvement projects may be for a three-year period to allow for this one-year job-tracking requirement.
Customized Training for Employees
Grant funding for employee training may be applied for an addition to a CDBG loan for new and expanding businesses under one project, up to a maximum of $400,000 per business. The maximum grant amount to a for-profit business or non-profit organization for each employee trained is $5,000. The maximum funding amount would still be $400,000 per local government applicant in a program year when combining a CDBG loan with grant-funded employee training to one business. A 1:1 match is required for an application that is only for employee training.
The Montana Department of Commerce loan review committee will evaluate each proposal on a case by case basis. The funding decision will be based on the level of benefit and impact to low and moderate income individuals which includes: the type and quality of jobs created; the kind of training offered; opportunities for advancement, and job benefits. The applicant must submit to MDOC a detailed hiring and training plan. The applicant must also respond to the additional evaluation criteria under Hiring and Training Plan for Customized Training for Employees. The applicant must demonstrate a compelling case for funding to the loan review committee by addressing the specific elements in the hiring and training plan.
