Operational Assistance Grants

Is there a separate application process for NMVCCs to apply for operational assistance grants?

No.  However, as part of the application, NMVCC applicants will be required to provide budget information and related documentation reflecting the anticipated expenditures of the grant funds. (For more information, see OA Grant Guidance).

Can potential investors provide additional capital for the purpose of meeting an NMVCC applicant's or an SSBIC applicant's required match for operational assistance grants?

SBA's regulations provide that a portion of private capital may be designated as matching resources if such funds are used to purchase an annuity or are otherwise segregated in a manner acceptable to SBA.  Investors should be made aware that monies designated for operational assistance will not be invested in small businesses for a return.

Who are the acceptable types of operational assistance grant matching resources?

NMVCC and SSBIC applicants are allowed to raise the required matching resources for operational assistance grants in the form of in-kind contributions, cash contributions, binding commitments for cash or in-kind contributions, and annuities from any source other than SBA.  Any matching resources not in the form of cash must be documented.

Are cash resources preferable to in-kind contributions?

Cash resources are important, because the NMVC legislation requires that at least 50% of the overall operational assistance grant matching resources be in the form of cash or commitments for cash.  However, applicants may raise up to 50% of their required grant matching resources in the form of in-kind contributions.  These resources can take the form of services contributed by other entities focusing on economic and community development in LI areas (for example, institutions of higher education, job training facilities, and local and state government agencies).

Does SBA prefer to see certain types of operational assistance proposed in the application?

SBA will not give preference to any particular types of operational assistance.  SBA expects different areas of the country and different investment objectives to need different types of operational assistance, and it is up to the applicant to describe in detail its understanding of those needs.

What are acceptable and unacceptable uses of operational assistance grant funds?

As a general rule, anything that could be attributable to the normal costs associated with running a concern would be an inappropriate use of operational assistance grant resources.  For instance, if a concern in which an NMVCC invests or expects to invest needs the professional assistance of an accountant to set up a suitable accounting system, the NMVCC could pay for that short-term need with grant funds.  However, maintaining the accounting system once it is in place would become the financial responsibility of the concern, and the NMVCC could not use grant funds to pay for that long-term need.

Does SBA view association with incubators as an appropriate use of operational assistance grant money?

Incubators may be a viable option for assisting young businesses with growth potential through the NMVC program.  SBA will review both the proposed uses of the grant money and the structure of the relationship between the NMVCC and the entity housing or sponsoring the incubator.  Applicants should be as specific as possible regarding the roles to be assigned when proposing to work with incubators, keeping in mind acceptable uses of operational assistance grant funds.