The McAllen Small Business Support Fund has a total of $4,000,000 dollars to assist small businesses located within City of McAllen limits

 

The McAllen Small Business Support Fund is designed to help businesses move through the COVID-19 pandemic and assist affected businesses by developing new opportunities. The goal of the McAllen Small Business Support Fund is to help McAllen businesses adopt safer operating procedures, weather periods of closure, or mitigate financial hardship resulting from the COVID-19 public health emergency. The funds are designed to enable the restart of activities to help reinstate, expand and grow existing McAllen businesses. 

Assistance will be targeted to small businesses facing financial insecurity, with substantial declines in gross receipts or facing other economic harm due to the pandemic, as well as businesses with less capacity to weather financial hardship, such as those with less access to credit. A small business is defined by the City of McAllen as a business that has less than 100 employees and no more than $3,000,000 in gross receipts.

All payments will be made from the McAllen Chamber of Commerce to the vendor/supplier directly. No reimbursements will be made to the awarded business or owner(s) even if it’s a valid expense. Businesses who are on the waiting list but who were not assisted from the initial allocation of the McAllen COVID-19 Small Business Fund as well businesses who have not received any assistance from this same fund shall take priority. Funds will be allocated on a first-come-first-served basis until the funds are depleted.

 

To be eligible for the McAllen Small Business Support Fund, applicant businesses must comply with the following: 

• Have a brick-and-mortar location within the city limits of McAllen, Texas or be a valid home-based business. A valid home-based business should present a Home Occupation Permit issued prior to March 1, 2020.

• Must be an active business that was established in McAllen before March 1, 2020 

• Gross annual revenues for 2020 must be $3,000,000 or less 

• Must be able to demonstrate that business was affected by the COVID-19 pandemic with at least a 20% decline in gross receipts for the year (2019 – 2020). The only valid documentation to demonstrate this would be tax returns. 

• A small business as considered by the city of McAllen

• Businesses with more than one physical location may apply for the grant program for one location only 

• Owners with multiple businesses, even if the businesses are constituted through different entities, are eligible to apply for only one business.

• The business must be in compliance with all taxes and regulations with the City of McAllen 

 

Who does not qualify? 

• Currency speculators 

• Securities investments 

• Businesses primarily engaged in lending, investments, or to an otherwise eligible business engaged in financing or factoring 

• Tobacco production 

• Gambling Concerns, including casinos, racing operations, or other activities whose purpose involves gambling 

• Sexually Oriented Businesses (live performances, product sales, items or materials) 

• Hobby businesses as defined by federal law 

• Multi-level marketing 

• Lobbying organizations and political organizations subject to Internal Revenue Code 527 

• Governmental/taxing agencies/departments 

• Pawn Shops 

• An individual who employs household employees such as nannies or housekeepers 

• A business where a 20% or more equity owner is incarcerated, on probation, on parole; presently subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction; or has been convicted of a felony within the last five years 

• Concerns engaged in illegal activities under federal, state, or local laws 

• A business that is otherwise prohibited by federal or Texas law 

• A business that is ineligible or precluded to receive federal or State of Texas funding due to federal laws (including, but not limited to the CARES Act) or Texas laws. 

• A business whose activities include selling firearms/weapons dealers, adult entertainment, and passive real estate investments.

 

Distribution of Funds 

Funds will be distributed based on three levels of funding: 

Level I – $10,000

Level II – $20,000

Level III – $30,000 

Level funding qualification will be strictly decided based on the revenues of the business in 2020 based on the submitted tax return. Businesses from $25,000 to $500,000 in gross revenues will be qualifying for Level I funding. Businesses with up to $500,001 – $2,000,000 in gross revenues will be qualifying for Level II funding. Businesses with up to $2,000,001 – $3,000,000 in gross revenues will be qualifying for Level III funding. 

Level I: funding will be considered a grant 

Level II: half of the funding ($10,000) will be considered a grant and the other half ($10,000) will be considered a deferred forgivable loan over 12 months 

Level III: a third of the funding ($10,000) will be considered a grant and two-thirds of the funding ($20,000) will be considered a deferred forgivable loan over 24 months 

The deferred forgivable loan will be eligible for forgiveness based on proof of good use of funds, its impact on the business, and the continued existence of the awarded business.

 

Valid Expenses: 

• Payment of rent and mortgage obligations for upcoming payments or past dues 

• Utilities 

• Counseling and legal aid to prevent eviction 

• COVID-19 preventive measures such as accommodations to a physical location to enable social distancing, enhance cleaning efforts, establish barriers or partitions, COVID-19 vaccination, testing or contact tracing programs, and purchasing of PPE 

• Authorized technical assistance, counseling, or services to assist with business planning needs 

• Short-term marketing campaigns 

• Replenishing inventory 

• Digital literacy assistance or job training to specifically address negative economic or public health impacts **

• Repairs **

• Other expenses ** 

** Indicates that the expense must be submitted prior to authorization for approval by the internal committee. 

 

Document Requirements: 

For State-incorporated businesses: 

• Texas Secretary of State of Texas file number (if applicable) 

• State of Texas Driver’s License Number from the owner(s) 

• Employer Identification Number (EIN) 

• Signed 2019 and 2020 tax return that has been filed depending on the structure of the business (Form 1065 for Partnership, Form 1120-S for an S-Corporation, 1120 for a C-Corporation, Form Schedule C for a Single Member, LLC) 

• Proof that the business has a brick-and-mortar within McAllen city limits (rent receipts, mortgage payments, etc.) 

 

For County-incorporated businesses:

• Valid Assumed Name Certificate Form / Doing Business As (DBA) documentation 

• State of Texas Driver’s License Number from the owner(s) 

• Social Security Number (EIN if available) 

• Signed 2019 and 2020 tax return that has been filed – Form Schedule C or equivalent report of business income 

• Proof that the business has a brick-and-mortar within McAllen city limits (rent receipts, mortgage payments, etc.) 

 

General Information for McAllen Small Business Support Fund: 

• Applicants, including any persons named in the application form, may not submit, or participate in more than one application. 

• Each applicant shall release and hold harmless the City of McAllen, the McAllen Chamber of Commerce, McAllen Small Business Support Fund, its administrator, and committee members from any and all matters regarding the McAllen Small Support Fund 

• Each applicant must allow the McAllen Chamber of Commerce to conduct a credit check report and background check of the business owner(s). If the information contains an adverse report, the applicant will be deemed ineligible

• Grant recipients must report back how the funds were used and how much impact it had on their business. Periodic reporting should be expected at the following intervals, post assistance: 

LEVEL I: At 6 months 

LEVEL II: At 6 months and 12 months 

LEVEL III: At 6 months, 12 months, 18 months, and 24 months 

Reports should include (1) whether the business remains open, (2) any changes due to COVID-19, (3) IRS 941 for the year in which assistance was provided and for one additional year, and (4) proof of certificate of good standing (or equivalent). 

• If a 2019 tax return is not available, the applicant should be deemed ineligible; the timeframe between the start of the year and the start of the pandemic is too short to determine COVID impacts versus the long-term feasibility of the enterprise. 

• A business that has been awarded a grant from the McAllen COVID-19 Small Business Grant, which was launched on June 1, 2020, will be considered for the McAllen Small Business Support Fund after 7 calendar days (January 17th, 2022) of the program launch.

Applications open on January 10th, 2022 at 10:00 A.M.

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