Business Eligibility Criteria

A business owner/business may qualify for the Microenterprise Grant Program if they meet the following eligibility criteria:

• Business must be located in the corporate boundaries of the City of Hagerstown;
  • Businesses that qualify as a “roving” business (i.e. a mobile business that travels from client to client without a particular location) must have at least two-thirds of their business occur in the corporate boundaries of the City of Hagerstown;
• Business must have five (5) or fewer total employees including the owner(s) in order qualify as a Microenterprise. For the purposes of this program there is no distinction between a part-time and a full-time employee in the headcount for the business;
• Business must be a private, for-profit business;
• Business must be in good standing with the City and State of Maryland;
• Business must be in compliance with all applicable City of Hagerstown regulations including the Land Management Code; and,
• Business must be established and operating for at least 12 months at time of application
  • Businesses that do not meet the above timeframe may still apply for funding, however, the applicant is required to submit a business plan and provide documentation of a consultation with a business counseling service (Small Business Development Council, SCORE, etc…) in addition to all other application requirements.

Eligible Businesses

Any business is eligible for this program as long as they meet the above criteria and qualify as a microenterprise.  The following list of example eligible businesses is not exhaustive and meant to serve as a guide for who might be an eligible applicant:

• Barber shops or hair salons
• Restaurants
• Lawn-care services

Income Eligibility Criteria

In addition to the business eligibility criteria, the business’ owner must also meet income eligibility qualifications as established by the U.S. Department of Housing and Urban Development (HUD).  An eligible applicant must have an income that is either at or below the following incomes levels based on the number of persons residing in their household:

Please note that income is defined not only as salary/wages but any business income as reported on the owner's most recent tax return. Income eligibility is determined through the processing of the below documents which must also be submitted at the time of application:

• Copies of three (3) most recent pay stubs for each employed person in the household
• If income is received from pension, social security, disability, annuity or any other income source, copies of award letters must be submitted
• Two (2) years of federal income tax returns/W-2’s
• Copies of two (2) most recent months household bank statements (savings and checking, all pages)

In the event that a household owns more than one business that qualifies based on the above criteria, only one business will be eligible to receive grant funding.

Eligible Uses of Funding

The minimum grant amount for this program is $2,500 and the maximum request is $5,000. No private match required.

Grant funding may be used for the following purposes:

• Acquisition of business equipment
• Purchase of inventory
• Necessary fixed assets (machinery, IT equipment, vehicles)
• Professional services including marketing and business promotion
• Technological infrastructure and upgrades
• Entrepreneurial training
• Operational expenses including payroll, utilities, rent/mortgage (for commercial locations)  

Grant funding may not be used for the following purposes:

• Real property improvements or rehabilitation
• Political activities
• Sectarian activities
• Utilities, rent/mortgage for residential or home based business occupancies
• Repayment of existing debt
• Reimbursement of costs incurred prior to grant approval

Required Documents

Applicants must submit the following required documents with their application at the time of submissions.  Applications will not be reviewed until all required pieces have been received.

• Application Form
• Business’ Previous Year Income Tax and Schedule C of IRS Form 1040 (if business has been established for one year or more)
• Completed Vendor Paperwork
• Financial Projections
• Executed Lease Agreement (if a business tenant in a commercial space)
• Business Plan and Documentation of Business Counseling Service (only if business has not been established for one year)

Income Verification Documents

• Copies of three (3) most recent pay stubs for each employed person in the household
• Copy of award letters for any income from pension, social security, disability, annuity or other income source
• Two (2) years of federal income tax returns/W-2’s or signed affidavit of tax filing status
• Copies of two (2) most recent months bank statements (checking and savings, all pages)

Note: the City may request additional documentation if necessary to ensure program eligibility. 

The following are commonly asked questions related to the Microenterprise Grant Program.  

What is a Microenterprise?

The U.S. Department of Housing and Urban Development (the federal agency responsible for the disbursement of CDBG funding) defines a microenterprise as a commercial enterprise that has five or fewer employees, one or more of whom owns the enterprise.  

This number reflects the total headcount of employees associated with a business and does not factor in full time equivalencies. 

How Much Funding is Available?

The minimum grant award for this program is $2,500, the maximum is $5,000.  There is no private match required as a part of this grant.  PLEASE NOTE:  Funding is administered as a reimbursement upon submission of approved receipts by the applicant.

When are Applications Due?

The Microenterprise Grant Program is administered on a rolling basis with no fixed deadline for submission.  Any applications that are received after all grant funding has been expended will be placed on a waitlist in the event additional funding becomes available.