Microenterprise/Small Business Stabilization Grant in Response to COVID-19

The City of Erie will invest up to $549,000 through its Community Development Block Grant (CDBG-CV) program funded by the United States Department of Housing and Urban Development (HUD) to support qualifying local businesses in the City that have been impacted by the COVID-19 Pandemic. Funds under this program are limited and it is the City’s intent to focus resources to supplement existing Federal or State programs already available to effectively support local businesses that retain the employment of citizens. Specifically, the City will use the funds to assist businesses with working capital and/or microenterprises.

The following requirements, selection criteria and procedures will be adhered to during the grant selection and disbursement process.



  • The use of CDBG grant funding is governed by Federal Regulations (24 CFR Part 570), which state that funds must primarily benefit individuals with low and moderate income (LMI) with a specific focus on the creation or retention of jobs set-aside for or made available to low to moderate income persons. This requirement is met through the following ways:

    1. Microenterprise (24 CFR Part 570.203):
      • The business owner receiving the CDBG grant funding qualifies as an LMI person and the business has five or fewer employees (including the owner).
      • LMI qualifications are based on family/household size and income and can be determined in the application process.
      • If the business owner is not LMI, the owner must document that the employees of the business meet the LMI requirements at the time of application for funding.
    2. Small Business Development:
      • If the business retains current employees, the business must certify that the jobs being retained with CDBG grant funding would be lost without assistance from the grant programs and;
      • that 51% or more of the employees being retained qualify as LMI persons.


  • Grants or forgivable loans of up to $5,000 are available to microenterprises that provide medical, food, cleaning, meals or transition to making hand sanitizer or face masks and other services related to the COVID-19 pandemic. Microenterprises will also be eligible for technical assistance if needed.
    Small businesses meeting all of the requirements detailed in this document shall be considered eligible for a grant or forgivable loan not-to-exceed $25,000.Proceeds from the grants or forgivable loans may be used to cover the day-to-day operating expenses of the business, such as payroll, rent, utilities, loan payments, etc. for up to four months.

  • In addition to the above CDBG regulation requirements, businesses meeting ALL of the following criteria shall qualify for grant or forgivable loan award consideration:

    1. Geographic Location Requirement:
    2. Businesses have to be located within the City of Erie. Businesses not located within the City will NOT be eligible.

    3. Physical Location Requirement:
    4. Businesses have to operate out of a physical location within the City of Erie. Physical location includes a “brick and mortar” building, and other types of physical spaces.

    5. COVID-19-Related Harm Requirement:
    6. The business must be able to demonstrate, with appropriate documentation, that they have experienced a loss of income due to COVID-19. Businesses should include details on the degree to which:
      i) The business has been directly impacted by new public health requirements (social distancing) related to the COVID-19 pandemic. Applicants should provide a description of how their business has been impacted within their application and have additional documentation available upon request such as profit/loss statements to support such claims.
      ii) The businesses have been impacted due to being considered “non-essential” and have lost their sources of revenue. Applicants should provide a description of how their business has been impacted within their application and have additional documentation available upon request.
      iii) The businesses primarily provide goods or services and have lost their sources of revenue. Applicants should provide a description of how their business has been impacted within their application and have additional documentation available upon request.
      iv) Must have been in business prior to March 1, 2020.

    7. Eligible Business Structure Requirement:
    8. a) Sole Proprietorship
      b) Partnership
      c) Corporation
      d) S Corporation
      e) Limited Liability Company (LLC)
      f) Self-employed
      g) Independent Contractor
      h) Locally owned Franchises

    9. Non-Eligible Businesses:
    10. a) Nonprofit organization/businesses;
      b) Businesses that involve the sale of medical or recreational cannabis;
      c) Private club or business that limits membership for reasons other than capacity;
      d) Businesses with at least 33% of its gross annual revenues from legal gambling activities;
      e) Businesses engaged in production or wholesale selling of tobacco products, vaping, liquor or sexually explicit materials;
      f) Pawnshop, liquor store, adult bookstore, non-therapeutic massage parlor, strip club or nightclub;
      g) Storage facility, trailer-storage yard or junkyard;
      h) A business in which a majority owner or member of the immediate family is an elected official of the City of Erie;
      i) Franchises not locally owned
      j) Chains;
      k) Businesses restricted to patrons above the age of 18;
      l) An establishment similar to any enumerated above; and/or
      m) Businesses deemed ineligible by the US Department of Housing and Urban Development (HUD) or the City of Erie.

    11. Application to Other Federal Program Requirements:
    12. a) Businesses must have a completed application for one or more federal programs to enhance cash flow availability. Such programs include the Payroll Protection Plan or the Small Business Administration’s Economic Disaster Injury Grant and Loan Program. If a business has applied for and received other federal or state assistance, the request for funding under this program must document that the assistance is still needed for overall operation of the business (i.e. gap financing) and that the use of funds in not duplicative in nature.

    13. Other Miscellaneous Requirements:
    14. a) Individuals whose self-employment income is substantially reported (51% or more) through IRS Form 1099-MISC are not eligible due to an inability to qualify under CDBG regulations;
      b) Must have been in operation on or before January 1, 2019, and must be currently in compliance with any state or local regulations or requirements;
      c) Eligible businesses can include essential and non-essential businesses so long as the business is continuing to pay employees or is willing to certify that previously furloughed/terminated employees will be rehired with the proceeds of this grant or forgivable loan or other supplemental federally-funded grant or loan programs; and
      d) Multiple applications/applicants cannot simultaneously compete for funding for the same property parcel or address.
      e) Business owners must provide their Employer Identification Number (EIN).
      f) Business owners must provide their DUNs Number.
      g) The program will be available to all citywide businesses meeting the eligibility requirements.
      h) Funding will be provided to business entities only. Acknowledgement of the business having a business bank account and employer identification number (EIN) will be required.


    Please be advised, CDBG Funding is intended to be gap financing and cannot be used for expenses that have been, or will be, applied to other Federal funding sources. For example, if your business plans to utilize the Payroll Protection Program (PPP) to cover payroll and rent expenses, those particular expenses cannot be applied to this program unless the business can demonstrate that available funding through the PPP or other Federal or state programs is insufficient to meet the need.


  • National Objective: Low/Mod Limited Clientele, Microenterprise (24 CFR Part 570.208(2)(iii)(iv)
    In addition to the above General Eligibility Requirements, the following criteria must be met in order for businesses to qualify for a Microenterprise Stabilization Grant:

    1. Low/Moderate Income Requirement:
    2. a) Business owner(s) or their employees have to meet the income requirements established by Federal funding eligibility guidelines. For a business owner qualify it has to have household income meeting HUD’s criteria for low-moderate income (less than or equal to 80% of the Area Median Income). If a business owner chooses to qualify their employees, the employees must meet the low-moderate income requirement (less than or equal to 80% of the Area Median Income). Documentation to prove income will be required. Households with incomes exceeding the limits below will be disqualified.

      2020 Average Median Income – Erie, PA
      Household Size
      Income Limits 1 Person 2 Persons 3 Persons 4 Persons 5 Persons 6 Persons
      80% AMI $40,050 $45,800 $51,500 $57,200 $61,800 $66,400
    3. Microenterprise Status Requirement:
    4. a) Businesses have to employ five people or fewer (including the owner), in accordance with Federal funding eligibility guidelines. Businesses that employ more than five employees will be disqualified.

    5. Documentation Requirement:
    6. a) Signed Certification Page;
      b) Copy of Driver’s License(s), Passport or State Issued Identification;
      c) Copy of Lease or Mortgage Statement – if using funds for this purpose;
      d) Payroll Documentation – if using funds for this purpose;
      e) 2019 Tax Return if Filed, otherwise 2018 tax return for the business;
      f) 2019 Tax Return if Filed, otherwise 2018 owner’(s) personal tax return;
      g) EIN
      h) DUNS
      i) CDBG Eligibility Tracking Sheet – COVID19; and
      j) Completed W9


  • National Objective: Low/Mod Job Creation and Retention (24 CFR Part 570.208(4).
    In addition to the above General Eligibility Requirements, the following criteria must be met in order for businesses to qualify for a Small Business Stabilization Grant:

    1. Low/Moderate Income Job Retention Requirement:
    2. a) Business must retain current employees, must certify that the jobs being retained with CDBG grant funding would be lost without assistance and that 51% or more of the employees being retained qualify as an LMI person.

      2020 Average Median Income – Erie, PA
      Household Size
      Income Limits 1 Person 2 Persons 3 Persons 4 Persons 5 Persons 6 Persons
      80% AMI $40,050 $45,800 $51,500 $57,200 $61,800 $66,400
    3. Status Requirement:
    4. a) Businesses must employ fewer than 50 persons (including the owner), in accordance with Federal funding eligibility guidelines. Businesses that employ more than fifty employees will be not be eligible.

    5. Documentation Requirement:
    6. a) Signed Certification Page;
      b) Brief overview of background and history of the business and what the funding request will be used for.
      c) Copy of Driver’s License(s);
      d) Copy of Lease or Mortgage Statement – if using funds for this purpose;
      e) Payroll Documentation – if using funds for this purpose;
      f) 2019 Tax Return if Filed, otherwise 2018 tax return for the business plus the previous 2 years of Tax Returns;
      g) 2019 Profit/Loss Statement if complete, otherwise 2018 Profit/Loss Statement;
      h) A written certification signed and dated by the employee/applicant indicating his/her family size and total income as necessary to determine whether the person is a member of a LMI household at the time the certification is made. The certification may either show the actual size and income of the household or contain a statement that the annualized family income is below the low to mod income limit for the applicable household size. The form must include a statement that the person making the certification is aware that the information being provided is subject to verification by the local or Federal government
      i) Declaration of Retained Jobs; and
      j) Completed W-9

    1. Businesses can apply via the online application portal link above. Applicants will be required to submit evidence, testimony or documentation supporting their case regarding the impact of COVID-19 on their business.
    2. During the application process, businesses will be asked to provide personal information including name, address, phone number, family size, household income, gender, race, and ethnicity of owners and employees to satisfy federal CDBG reporting requirements.
    3. The City will fund as many qualified applicants as possible, as funding allows.
    4. Recommended grantees will be required to enter into a grant or forgivable loan agreement with the City.
    5. Once a grant or forgivable loan agreement is approved, 90% of funds will be disbursed to recipients.
    6. Grant recipient will be required to submit documentation regarding its use of funds to the City to receive the remaining 10% of the grant award. This includes invoices, mortgage/rent statements, payroll registers and cancelled checks.
    7. Costs, under this grant or forgivable loan, that are incurred before March 27, 2020 are not reimbursable.
    8. The City reserves the right to reject any or all applications received and/or negotiate or cancel in part or in entirety grants or forgivable loans resulting from application awards if it is in the City’s best interest to do so. The City further reserves the right to establish the amount of grant or forgivable loan funds awarded; raise the individual grant or forgivable loan ceilings; and to award funds to other applicant(s) should funds become available due to de-obligation, etc.


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