This page provides background information and web page links for federal government and Massachusetts state government funding sources grouped in five categories:

  1. Economic Development Planning 
  2. Project Planning and Feasibility Analysis 
  3. Small Business Financing 
  4. Real Estate Development 
  5. 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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