$101,000 local match would be added to $99,000 in USDA funds for a revolving loan pool.
The Crookston City Council last year allocated $350,000 from the City’s budget to CHEDA for various strategic economic development initiatives. After a unanimous vote in favor of the CHEDA Board of Directors this week, $101,000 from that fund is going to be used as a local match for a $99,000 USDA Rural Business Development Grant application.
CHEDA Executive Director Craig Hoiseth says the application deadline is the end of March.
So why ask for $99,000 and not $100,000? Asking for less than $100,000 increased the number of points the local application would receive in the competitive scoring system, he explains. Further boosting the application’s score is the fact that the local match is more than 50%. Hoiseth initially mentioned $100,000 as the local match, but CHEDA Board member Betty Arvidson suggested increasing it to $101,000 to bring the total grant package to an even $200,000.
The size of CHEDA’s request coupled with the local match appears to be the “sweet spot” for getting funded, Hoiseth added. “We have a legitimate shot at getting funded,” he said.
If funded, the grant would establish a new, local revolving loan fund that focuses on jobs, new and emerging businesses. With the COVID-19 pandemic drastically impacting the economy in a negative way that is only likely to get more dramatic as its scope grows in the region, Hoiseth said if CHEDA had the grant funding now, he could envision it being used for emergency, low-interest loans to local businesses hit hard by the pandemic.
“We’re going to have local businesses severely impacted by what’s happening,” he said.
The $350,000 from the City is an ideal place to find the dollars, Hoiseth added, because the USDA’s grant criteria require that the local match involve funds not committed to any other program or part of any other initiative.
If the grant is funded, every loan application would have to be approved by the USDA as well. Hoiseth said that may create another layer of red tape, but that doesn’t diminish the impact of “bringing $100,000 into Crookston that isn’t here today.”
Dollars from repaid loans would then be under CHEDA control and be invested in new loans.
Hoiseth said there is around $500,000 in the USDA fund this year, and it appears that around a handful of applications will be approved.