Small Business
Financing (SBF)

Program Guideline and Available Financing

Recovery Grant Program

The Recovery Grant Program will help small, existing or new businesses that are restarting operations, awarding grants of up to $50,000 for working capital and non-affixed equipment and/or invest in growth opportunities, in the wake of hurricanes Irma and María.

The amount of the grant and programming of withdrawal of funds will be determined according to the Recovery and Growth Plan of the company and the subscription process. As an internal control, the DDEC will require the businesses to withdraw the grant funds in increments, this after complying with the business performance indicators.

Working Capital Revolving Line of Credit

The SBF Working Capital Revolving Line of Credit Program (Option A) will provide up to $100,000 to cover working capital and movable equipment expenses for businesses that will be able to repay short term debt. The Government Development Bank for Puerto Rico (BDE) will calculate the amount of the LOC based on the Recovery and Growth Business Plan, management capacity and contracts or related evidence of receivables of Applicants.

The Line of Credit will be 100% financed by CDBG-DR and will have a one (1) year term, with the option of being renewed according to performance indicators.

Term Loan for Larger Projects

The SBF Term Loan for Larger Projects will leverage CDBG-DR funds with private capital for larger loans that can fund working capital, equipment and assets that can be collateralized. This includes acquisition and/or improvement to real estate and related business facilities.

The CDBG-DR funds will provide a guarantee or a loss reserve of up to 25% of the loan amount. The amount of the loan and the repayment term of each Term Loan will be established according to the useful life of the guarantee, the financial viability of the project and the business capability.

The BDE will work with the DDEC to identify capital sources to finance the Term Loans with the credit advantage of CDBG-DR.

This program is under development and will be launched according to market demand.

Program Objectives

The Department of Economic Development and Commerce of Puerto Rico (DDEC) is administering two new programs to help businesses access an assignment of $300 million from the United States Housing and Urban Development (HUD). The Recovery Grant Program will help small, existing or new businesses that are restarting operations that have been affected by hurricanes Irma and María and have limited access to critical capital to recover, grow their business, as well as retain and create employment. DDEC will work with the Government Development Bank for Puerto Rico (BDE) which is the underwriter and the loan administrator.

The vision of helping Puerto Rico with these programs is as follows:

  • Award grants and loans to promote the recovery and growth of local businesses.
  • Retain and create employment for local residents.
  • Help businesses complete their application by assigning them a Relationship Manager that will provide assistance during the process.
  • Help attract private capital to address the unmet financial needs of small businesses and contractors.
Program Roles
  • The Department of Economic Development and Commerce (DDEC): Program Administrator

  • Puerto Rico Economic Development Bank (BDE): Underwriter and loan administrator

  • Relationship Managers: Assist applicants in completing the applications correctly, providing technical assistance, gather the correct documentation, and in developing a Plan of Recovery and Growth.

Personalized Assistance

The Department of Economic Development and Commerce will be working alongside the Relationship Managers which will offer applicants guidance with the following:

  • Refine their business and marketing recovery and growth plan.
  • Understand the application process and assist in filling it out correctly.
  • Prepare the necessary documentation for the approval of the loan and any other necessary documentation.
  • Understanding business growth and providing continuous support throughout the process.
Application Process

All applicants must follow these steps:

Complete a Pre-Application

All Applicants will begin by completing a pre-application to verify eligibility. If approved, you will be directed to complete a full application.

Complete a Formal Application

All Applicants will work with a Relationship Manager to complete a full application and gather all the necessary documentation for submission.

Sign Grant and/or Loan Agreement

All Applicants who are approved for funding will work with a Relationship Manager to complete and sign an agreement that will outline their compliance responsibilities as per federal requirements.

Option to appeal a decision

All applicants can appeal any determination of ineligibility to receive recovery funds

Elegibility
  • Be a business incorporated, registered and/or licensed in Puerto Rico
  • Have no outstanding defaults, claims and/or distressed debts with the Federal Government, Government of Puerto Rico and any other units of local government.
  • Be able to document how the business suffered hurricane related damage or disruption
  • Cannot be listed on the HUD Debarred List 1, or the federal System for Award Management (SAM) Exclusion list. (Access list here)
  • Complete the Pre and Full Applications in in a thoughtful and thorough manner that includes providing a clear Recovery and Growth Business Plan for growing a business within disaster recovery
  • Provide financial statements and notes that show Pre- and Post-Hurricane Financial Conditions and projections
  • Provide professional references and credit and/or banking references
  • Meet the CDBG-DR Compliance and Financial Underwriting Criteria for financial and performance capabilities as outlined within the Application for Funding.
  • Present plan and commitment to retain and/or create employment for residents of Puerto Rico.
Business Recovery and Growth Plan

The Business Recovery and Growth Plan serves as the guarantee of the business to obtain federal funding when traditional collateral methods cannot be used. An applicant must develop a thoughtful business plan and follow it diligently to better position the business for success.

As part of the CDBG-DR programs application process, the Relationship Manager will work with you to develop this plan.

The Business Recovery and Growth Plan addresses the following questions:

What is your business? What Is your story?

  • What is the problem that your business is looking to solve? What is your performance history?

What and/or whom is your Target Market?

  • Who are your clients? What are your requirements? Who are your competitors? What makes your business different?

What are your Products and/or Services?

What is the Ownership, Management and Staffing structure of your firm?

  • Who are the owners and what capacity/experience do they bring to the table? How does your employee base compare before and after the hurricanes?

What Hurricane Damage and/or Disruption did your business experience?

What are the Recovery and Growth Goals for the business?

  • What are your business and financial goals for the next 3 years? Have you secured financing through other funds? How will you determine that you have successfully complied with you plan?

What is the proposal for SBF or CCRL CDBG-DR grant and/or loan funds?

  • How much will you need and for what period of time? Which unmet recovery and growth need do you want to address with CDBG-DR funds? How many employments will you retain and or create with CDBG-DR funds?

What is your Financial Condition and what are your Growth Projections?

  • How will you compare sale, production and performance figures from before and after the hurricanes? What is the quality and history of your credit standing?

What is your Marketing and Sales Plan?

What are the key factors for success? What are the Risks for the Business and how will you Mitigate them?

  • Include: Administration and labor, client market and or competition, product and services, capital, business ecosystem before and after the hurricanes.
FAQ

To access FAQs, please click here

Construction and Commercial Revolving Loan (CCRL)

Program Guideline and Available Financing

The CCRL Capacity Building Grant

The CCRL grant is intended to help contractors and subcontractors complete as much disaster recovery construction work as possible. The CCRL Capacity Building Grant will help businesses be more competitive and to secure and successfully manage new CDBG-DR, government and/or privately funded construction work (“Construction Contract”) by providing grants up to $50,000 for mobilization and capacity building activities. The grant will be released in increments as the contractor achieves milestones as defined in the commitment letter and grant agreement.

Interim Financing and Working Capital

Borrowers can be approved for up to $950,000 in a CDBG-DR-funded revolving line of credit, contingent upon them securing a disaster recovery related construction contract (for a total award of up to $1,000,000, including the Capacity Building Grant). Lines of credit will be sized based on the value of construction contracts and the business recovery and expansion plan.

The line of credit will be made available to borrowers demonstrating an ability to repay the loan and meeting the underwriting and compliance criteria. Compensating factors may be used to assist in determining an applicant’s bankability based on flexible underwriting criteria.

Program Objectives

The Department of Economic Development and Commerce of Puerto Rico (DDEC) is administering two new programs to help businesses access an assignment of $300 million from the United States Housing and Urban Development (HUD). The Recovery Grant Program will help small, existing or new businesses that are restarting operations that have been affected by hurricanes Irma and María and have limited access to critical capital to recover, grow their business, as well as retain and create employment. DDEC will work with the Government Development Bank for Puerto Rico (BDE) which is the underwriter and the loan administrator.

The vision of helping Puerto Rico with these programs is as follows:

  • Award grants and loans to promote the recovery and growth of local businesses.
  • Retain and create employment for local residents.
  • Help businesses complete their application by assigning them a Relationship Manager that will provide assistance during the process.
  • Help attract private capital to address the unmet financial needs of small businesses and contractors.
Program Roles
  • The Department of Economic Development and Commerce (DDEC): Program Administrator

  • Puerto Rico Economic Development Bank (BDE): Underwriter and loan administrator

  • Relationship Managers: Assist applicants in completing the applications correctly, providing technical assistance, gather the correct documentation, and in developing a Plan of Recovery and Growth.

Personalized Assistance

The Department of Economic Development and Commerce will be working alongside the Relationship Managers which will offer applicants guidance with the following:

  • Refine their business and marketing recovery and growth plan.
  • Understand the application process and assist in filling it out correctly.
  • Prepare the necessary documentation for the approval of the loan and any other necessary documentation.
  • Understanding business growth and providing continuous support throughout the process.
Application Process

All applicants must follow these steps:

Complete a Pre-Application

All Applicants will begin by completing a pre-application to verify eligibility. If approved, you will be directed to complete a full application.

Complete a Formal Application

All Applicants will work with a Relationship Manager to complete a full application and gather all the necessary documentation for submission.

Sign Grant and/or Loan Agreement

All Applicants who are approved for funding will work with a Relationship Manager to complete and sign an agreement that will outline their compliance responsibilities as per federal requirements.

Option to appeal a decision

All applicants can appeal any determination of ineligibility to receive recovery funds

Elegibility
  • Be a business incorporated, registered and/or licensed in Puerto Rico
  • Have no outstanding defaults, claims and/or distressed debts with the Federal Government, Government of Puerto Rico and any other units of local government.
  • Be able to document how they encountered storm related damage or disruption
  • Cannot be listed on the HUD Debarred List, or the federal System for Award Management (SAM) Exclusion list. (Access list here)
  • Complete the Pre and Full Applications in in a thoughtful and thorough manner that includes providing a clear and actionable Recovery and Growth Business Plan for growing a business within disaster recovery
  • Provide financial statements and notes that show Pre- and Post-Storm Financial Conditions and projections moving forward
  • Provide professional references and credit and/or banking references
  • All the same conditions as the list for Small Business Financing
  • Be a licensed general contractor or subcontractor
  • Have a demonstrated track record in construction
  • Meet the CDBG-DR Compliance and Financial Underwriting Criteria for financial and performance capabilities as outlined within the Application for Funding.
Business Recovery and Growth Plan

The Business Recovery and Growth Plan serves as the guarantee of the business to obtain federal funding when traditional collateral methods cannot be used. An applicant must develop a thoughtful business plan and follow it diligently to better position the business for success.

As part of the CDBG-DR programs application process, the Relationship Manager will work with you to develop this plan.

The Business Recovery and Growth Plan addresses the following questions:

What is your business? What Is your story?

  • What is the problem that your business is looking to solve? What is your performance history?

What and/or whom is your Target Market?

  • Who are your clients? What are your requirements? Who are your competitors? What makes your business different?

What are your Products and/or Services?

What is the Ownership, Management and Staffing structure of your firm?

  • Who are the owners and what capacity/experience do they bring to the table? How does your employee base compare before and after the hurricanes?

What Hurricane Damage and/or Disruption did your business experience?

What are the Recovery and Growth Goals for the business?

  • What are your business and financial goals for the next 3 years? Have you secured financing through other funds? How will you determine that you have successfully complied with you plan?

What is the proposal for SBF or CCRL CDBG-DR grant and/or loan funds?

  • How much will you need and for what period of time? Which unmet recovery and growth need do you want to address with CDBG-DR funds? How many employments will you retain and or create with CDBG-DR funds?

What is your Financial Condition and what are your Growth Projections?

  • How will you compare sale, production and performance figures from before and after the hurricanes? What is the quality and history of your credit standing?

What is your Marketing and Sales Plan?

What are the key factors for success? What are the Risks for the Business and how will you Mitigate them?

  • Include: Administration and labor, client market and or competition, product and services, capital, business ecosystem before and after the hurricanes.
FAQ

To access FAQs, please click here