AGAWAM – The Town of Agawam has created a grant program to aid small businesses that have been grappling with the threat of permanent closure in the face of the COVID-19 pandemic that has caused many establishments to lay off workers and temporarily close their doors.

“The city council and myself, with our Planning & Community Development Director Marc Strange, took a look at how to help,” struggling businesses, Sapelli said.

Originally, the idea had been to offer a zero percent interest loan program funded through the stabilization account, which the city council approved on April 2. Sapelli said that after the program was approved, the town was made aware that those funds cannot be used to issue loans.

Sapelli, city solicitor Stephen Buoniconti and Strange presented information to the city council during the meeting on April 21 about the initial loan program and the creation of the grant program. Sapelli explained that many communities surrounding Agawam were using Community Development BlockGrants (CDBG) to develop small business grant programs. However, these communities, Sapelli explained, were what he referred to as “entitlement communities.”

This, he said, meant “they automatically receive funding every year for economic development and don’t have to necessarily get permission from the state as to what projects they’re going to be doing with the funding.” Agawam, however, was not an entitlement community, and are required to reapply and outline which projects they intend to use the grants for each year.

Instead, after a resolution by the mayor, the city council voted during the April 21 meeting to create a grant program using CDBG funds in the amount of $165,000 for which the town had been previously approved. The initial purpose of the funding was to work on roadways in north Agawam, but after conversations with the state, the town was allowed to reallocate the money for the more immediate challenges businesses are currently facing due to the COVID-19 outbreak.

Businesses can apply for up to $10,000 of grant money that can be used to help with salaries, mortgages and other overhead costs that, with the current loss of income, threaten to permanently close businesses in town, Sapelli said.

During the council meeting, Sapelli explained due to the fact that the funds for the grant were using CBDG monies, the eligibility for the grant would be “somewhat restricted.”

The eligibility requirements for the grant include the existence of a physical establishment in Agawam with five or fewer employees, a low- to moderate-income level for the business owner’s household, the absence of any tax liens or legal judgments and good standing with the town and state.

The business should also have been open in town for at least 12 months, although establishments open for shorter periods will be evaluated on a case by case basis. City Council President Christopher C. Johnson said in a statement that these grants will “give a helping hand until the economy is reopened” and the council unanimously supports the grant program.

Sapelli said the requirements, unfortunately, would limit which businesses in town that are currently struggling would qualify for the grant. “So, unfortunately, if you think that out, it doesn’t help the restaurants that have been closed or been reduced to takeout,” he said.    

During the city council meeting, Buoniconti said they were hoping to distribute a second wave of grants with money that had been approved through the CARES Act by the federal government.

Although Sapelli said an estimated $20.4 million in additional funds is expected to be released statewide for municipalities that do not fall under “entitlement” income guidelines, he could not say exactly how much Agawam may receive.

“We should be able to get a decent amount,” he said.

Sapelli said should they be able to move forward with a second round of grants, the town would like “to try to tailor that next round for maybe some of those businesses moving forward.”

Sapelli assured Reminder Publishing that he was “not going to abandon” the roadway project, despite the reallocated funding.

“That area is important to the continued development of Agawam,” Sapelli said. He added that there are other ways to pay for the project, including the use of stabilization funds.

Applications for the grants should be submitted to MStrange@agawam.ma.us or in person at the Town Hall no later than May 1.