Proposal Requirements:

  • Project description
  • Project impact/leverageon Uptown Lexington
  • Request for grant amount/loan interest rate (Please see Cost Limits below)
  • A business or marketing plan, including pro forma ($3/$1 match)
  • Personal financial statements of all persons providing personal guaranties
  • Audited historical financial statements, covering the most recent three full years, as well as at least two-years of projections.
  • Cost and terms of financing proposed
  • Use of CDBG funds
  • Description of any other financing in the project, public or private, including any other local revolving funds that may be used for the proposed project
  • Three years cash flow projections including the debt service of the proposed loan;
  • The identified public benefit, including tax or other revenues anticipated from the completed project should be specified in the Project Description.
  • Project must be ready to proceed – all proposed funds must be committed, and a legally binding commitment executed between the applicant and the private entity(ies) making the private investment.
  • The grant must be completed within thirty (30) months from the date that the recipient executes the Grant Agreement.

Project Leverage

The project must include private investment, including a commitment from a private entity to open or expand an enterprise in the project area that will increase economic activity in the area. The private entity may be either a for-profit business or a non-profit agency. The increased economic activity may consist of on-site employment or the attraction of customers, clients, or residents to the project area. Projections must be supported by appropriate market study, business plan, and company or agency commitments. Direct assistance to the private entity must meet underwriting guidelines that are designed to ensure:

  • That project costs are reasonable
  • That all sources of project financing are committed
  • That to the extent practicable, CDBG funds are not substituted for non-Federal financial support
  • That the project is financially feasible
  • That to the extent practicable, the return on the owner’s equity investment will not be unreasonably high
  • That to the extent practicable, CDBG funds are disbursed on a pro rata basis with other finances provided to the project

For every dollar of grant funds, the project must include at least three dollars of private funds that will expand economic opportunity. Private funds may include owners’ equity, loans, and tax credits. Other federal or state grants will not count as leverage.

Project Cost Limits

Grant funds must have at least the following impacts:

  • One job created for each $35,000 of grant funding; and/or
  • One dwelling unit created for each $33,000 of grant funding; and/or
  • $350 for each increased trip-destination into the area annually and/or
  • $6,000 of increased sales and/or wages for each $1,000 of grant funding.

Terms of assistance to private enterprises

  • Up to $15,000 apiece may be provided as matching grants to private enterprises.
  • Assistance greater than $15,000 to a private enterprise must be provided as an amortizing loan, at terms justified by the pro forma.