Frequently Asked Questions

What is the Energize Colorado Gap Fund?  

  • The Energize Colorado Gap Fund will provide more than $25M in small business loans and grants to boost small business enterprises that are the economic engines throughout the state. Sole proprietors, businesses and nonprofits with less than 25 full-time employees can apply for up to a $15,000 grant and a $20,000 loan for a possible combined total of $35,000 in financial assistance. Anyone eligible is welcome to apply, preference will be given to small businesses majority-owned by minority, women or veterans and or located in a rural area, and that have not been successful in pursuing and/or receiving  funds from other federal, state and local assistance programs such as the Paycheck Protection Program.

 

Is this a grant or a loan program? 

  • Both.  Monies are available in both a grant and a loan. There is only one application for the Gap Fund. 

 

What is the difference between a grant and a loan?

  • Grant money provided to an eligible small business is not required to be repaid.  A loan has an assigned interest rate and must be repaid over a defined period of time.

 

Who is eligible to apply?

  • Small businesses/enterprises – Colorado sole proprietors and registered small businesses in good standing with the state and nonprofits.
  • IRS classified nonprofit charities and associations. Specifically those supporting economic development, small businesses, and tourism and those supporting our priority businesses will be prioritized.
  • Small businesses and nonprofits must have fewer than 25 employees. An employer may use its off-season employee count.
  • Priority will be given to the following, but all eligible Colorado-based micro and small businesses may apply:
        • Black, Indigenous, People of Color, Veteran-owned, Woman-owned or rural businesses
        • Rural areas are defined as:
          • A county with a population of less than fifty thousand people
          • A municipality with a population of less than fifty thousand people that is located ten miles or more from a municipality with a population of more than fifty thousand people
          • The unincorporated part of a county located ten miles or more from a municipality with a population of more than fifty thousand people
          • Those that have not been successful in pursuing and/or receiving funds from other federal, state, and local assistance programs such as the Paycheck Protection Program. 

 

If I apply, am I guaranteed a grant or a loan?

  • No, the Gap Fund is not a first come, first serve program.  It is a competitive program with priority given to groups listed below.  Each application will be thoroughly evaluated and approved if applicants meet the criteria.  While we hope to help as many people as possible, these funds will eventually run out and all applicants are not guaranteed a grant and/or loan.   

 

What are the differences between the nonprofit and small business application?

  • Nonprofits must meet the eligibility criteria for all “small business’ AND the mission and/or programs of the nonprofit entity should directly support economic development
  • Once selected, the application system will direct nonprofits to complete questions that apply to nonprofits only.
  • In the body of the application nonprofits will be asked to describe how the nonprofit's mission and programs directly support small businesses, tourism, or economic development.  Tourism is an earmarked priority set by SB20-222.  Nonprofits should look at the specific language in the application and consider how their mission may align to the tourism industry in answering this question.
  • The demographic questions that affect the “preference” points for applicants consider the population served by the nonprofit. The nonprofit will need to answer yes/no whether their mission and programs primarily serve racial or ethnic minority, women, veteran or rural businesses?  Board and management composition does not impact demographic “preference” for nonprofits.
  • All other questions are the same.  Keep in mind “small business” is a catch all term throughout the application and includes nonprofits. 

 

How does a business show it’s been impacted?  

  • Businesses need to demonstrate and clearly articulate through writing (mentor programs are available for help), the economic hardship their business is experiencing through the business’s choice of documents such as bank records, point of sale receipts, profit and loss statements, or other documents demonstrating economic harm.  The types of economic hardships that qualify for assistance through this program include:
    • Loss of revenue due to the COVID-19 public health emergency associated with a stay at home order; 
    • Loss of revenue due to the COVID-19 public health emergency associated with a voluntary closure of the business to promote social distancing measures; 
    • Loss of revenue due to a decrease in customer demand due to the COVID-19 public health emergency; or
    • Increased costs to operate the business due to the COVID-19 Public Health Emergency.

 

How does this work?

    • The Governor and the State Legislature have designated a $20 million dollar grant from the CARES Act to distribute alongside $5 million in loans from private donors and other state funds to help Colorado’s micro and small business owners.
    • Colorado Housing and Finance Authority (CHFA) holds and distributes our funds.
    • A small business may apply for a combination of loan and grant money through this Gap Fund.
    • The Gap Fund will receive a mix of loans and grants to provide to local lenders.
    • Distribution of funds will follow guidelines and allocations established by the Executive Committee.
    • Our Executive Committee is a diverse group of members experienced in lending and community development, as well as leaders representing the communities we aim to serve.
    • Funds will be broadly distributed across the group of community lenders with the goal of addressing the critical needs of micro and small businesses across all counties of the entire state.
    • Our Executive Committee will monitor how these loans are used, address special needs and report back to the state.

 

What about tourism?  

  • Five million-dollars of grant money for tourism related businesses have been ear-marked until October 1st, 2020.  
  • Tourism Sector industries specifically include:
    •     Hotel, Motel and Lodging;
    •     Food, Beverage and Restaurant;
    •     Ski;
    •     Private Travel attractions and casinos;
    •     Other Outdoor Recreation;
    •     Tourism-related Transportation
    •     Destination Marketing
    •     Cultural Event and Facility Groups

 

Cannabis industry is not eligible but what about the hemp industry?

  • Businesses that grow, distribute, or sell Cannabis are not eligible per federal requirements of this program.  Hemp businesses will be allowed as long as they meet federal and state guidelines.

 

Are farmers / farms eligible? 

  • Yes.

 

Are additional points prioritized for Gold Star Family?

  • No additional points will be awarded for Gold Star Families, however points will be awarded for businesses that identify as Veteran Owned.

 

What will the loan payments be like?  For loans specifically, the maturity rate is 24 to 36 months. The interest rate is:

    • 0 to 4 months payment deferment 
    • Initial 12 months: 1%
    • After 12 months: 1.5%

 

What are the terms of the loan? Anticipated loan terms? 

  • Principal amount: $5,000-$20,000
  • The maturity rate is 24 to 36 months. 
  • The interest rate is: 0 to 4 months payment deferment and no interest / Initial 5-12 months: 1% / After 12 months: 1.5%
  • No payments the first 4 months. No prepayment penalty.
  • Secured Loans: mix of structures including personal guarantee, collateral, and possible prohibition on additional debt without consent.

 

 What is the cut off date for applications?

  • There is no “cut off date” for applications, however funds must be committed through the lenders/grantors by December 30, 2020.
  • CHFA is managing the fund and will be establishing the windows when applications will be opened and closed.  If you sign up for our newsletter, you will be notified as soon as they are announced.
  • An applicant may apply for funding more than once.  This may be considered if;
    • The financial loss from March 1, 2020 - time of application was less than $15k
    • Additional loan funds are desired 

 

Are there limits on what I can spend my loan or grant on?  Yes, loans may be spent on items agreed to by the lender. Grants may be used to reimburse:

    • Loss of revenue due to the COVID-19 public health emergency associated with a stay at home order; 
    • Loss of revenue due to the COVID-19 public health emergency associated with a voluntary closure of the business to promote social distancing measures; 
    • Loss of revenue due to a decrease in customer demand due to the COVID-19 public health emergency; or
    • Increased costs to operate the business due to the COVID-19 Public Health Emergency.

 

Examples of allowable expenses include:

    • Payroll costs
      • Increased workers compensation cost due to COVID-19 pandemic
      • Premium Pay 
      • Hazardous duty, physical hardship in case related to  COVID-19 pandemic
      •  Overtime related to  COVID-19 pandemic
      • Employee stipend if deemed necessary due to  COVID-19 emergency provided on a reimbursement basis
    • Rent to mitigate COVID-19 impact
    • Equipment
    • Real property 
    • Livestock depopulation deemed necessary for public health reasons
    • Programs to implement COVID-19 social distancing measures
    • Training to mitigate impact for employees furloughed due to COVID-19 
    • Inventory for items to mitigate COVID-19 impact

 

Your grant or loan cannot be spent on:

    • Expenses that have been or will be reimbursed under any other federal program 
    • Losses that have been or will be covered under any other federal program
    • Taxes
    • Lobbying
    • Capital Purchases or Construction
      • Capital purchases are defined as expensed greater than $25,000 with a usable life of five years or more.

 

Can I use my phone to apply?

  • Yes, the application process is mobile enabled. Documents can be photographed and attached to the application.

 

I don’t have a way to scan or upload documents?  What do I do?

  • Required documents can be photographed and attached to your application.
  • If you believe you will need additional assistance, you can contact the Small Business Development Center and they will assign a consultant from their nearest location that can work with you to fill out the application with you.  Would you like me to try to connect you so they can work on getting someone assigned to you?

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