City Launches $5 Million Grant Program For Microbusinesses In Low- And Moderate-Income Neighborhoods

CHICAGO (CBS) -- On the heels of a $100 million small business loan program, the city is offering a new $5 million grant program to provide financial assistance for so-called "microbusinesses" in low- and moderate-income neighborhoods.

Mayor Lori Lightfoot and Business Affairs and Consumer Protection Commissioner Rosa Escareno announced the new Microbusiness Recovery Grant Program for up to 1,000 businesses with fewer than five employees.

"Our small businesses are fundamentally rooted in, hiring in and building wealth in Chicago's neighborhoods – which is why we need to ensure our local entrepreneurs most-impacted by the COVID-19 pandemic have the resources and supports they need to survive this unprecedented moment of economic hardship," Lightfoot said in a statement. "By providing $5,000 in grants into the hands of up to 1,000 businesses, we are building on our commitment to ensure Chicago's businesses have a road to recovery."

Funded by private donations, the program will award $5,000 grants through a lottery program. To qualify, businesses must have four or fewer employees, less than $250,000 in annual revenue, and experienced at least a 25% drop in revenue due to the COVID-19 crisis. Eligible businesses also must have been open for at least a year, and be located in low- or moderate-income areas of the city, defined as any Community Area with at least 65% low- or moderate-income individuals. A map of the eligible Community Areas can be found here.

The mayor's office said such establishments make up more than half of all businesses in the city, and are more likely to be owned by minorities or immigrants, and to have faced challenges getting federal assistance through the Paycheck Protection Program.

Businesses can apply through Monday at www.chicago.gov/recoverygrant. Grants will be awarded one week later, according to the mayor's office.

"Chicago's small businesses are fundamental to the economy and character of our city," Escareno said in a statemnt. "Many of our businesses have been left out of other financial options because they lack lending relationships or are unable to take on debt. This investment means that microbusinesses in critical areas of the city will have the cash they need to navigate this crisis."

In March, the city launched a $100 million small business resiliency fund to provide low-interest loans of up to $50,000 to businesses with fewer than 50 employees. The deadline to apply for that program has passed, and the mayor said the city has distributed 232 loans so far, and is processing 300 others, totaling $20 million in loans to date.