The City of Lufkin City Council has established a small business grant program designed to preserve local businesses and assist in recovering from the financial effects of COVID-19.

According to a press release the City of Lufkin anticipates receiving approximately $500,000 from the CARES Act, and has partnered with the Hotel Occupancy Tax Board to distribute those funds to Lufkin businesses through the We Love Lufkin small business grant program.

Of the funding, three quarters will go towards supporting any small business across the City of Lufkin. The other quarter is specifically dedicated to supporting minority-owned businesses and businesses located in low to moderate-income communities.

Grant applications will be reviewed and processed with the help of members of the Hotel Occupancy Tax Board.

Online applications will be accepted at www.cityoflufkin.com from July 10 through 5 PM on July 20. Complete applications will be reviewed as soon as they are received, as long as funds are available.

Grant funds are open to businesses who fit the following criteria:

  • Small business (50 employees or less).
  • Located within the City of Lufkin, with a Lufkin mailing address.
  • Registered to do business in the State of Texas.
  • Business must have been in operation since Sep. 1, 2019.
  • Demonstrate a 20% reduction in business as a result of the COVID-19 pandemic.
  • Self-employed individuals, independent contractors, sole proprietors, and nonprofits serving the business community are also eligible.
  • If applying as minority-owned, verify the business’s 51% ownership by a minority or group of minorities that are US-citizens, that the business is registered in the State of Texas, and owned, managed and operated on a daily basis by the minority of group or minority owners.

For more information about eligibility requirements and other questions, a list of frequently asked questions is listed later in this post.

Funding Information

Depending on the number of full-time staff a business employed as of March 20, 2020, the funding levels for a We Love Lufkin grant are:

  • Level I businesses with less than 5 employees (including owner) are eligible for a grant of $5,000.
  • Level II businesses (with 6-20 employees) are eligible for a grant of $7,500.
  • Level III businesses (with 21-40 employees) are eligible for a grant of $10,000.
  • Level IV businesses (with 41-50 employees) are eligible for a grant of $15,000.

If a business has already received funds from the Paycheck Protection Program (PPP) or an Economic Injury Disaster Loan, they are still eligible to receive these funds. However, priority will be given to businesses that have not received funding through these programs.

We Love Lufkin grant funds may be used to reimburse the costs of business interruption due to COVID-19, as a result of required closures, voluntary closures to promote social distancing, or decreased customer demand. Examples of these costs include:

  • Working capital.
  • Machinery and equipment.
  • Payroll expenses.
  • Health care benefits.
  • Contract labor.
  • Supplier payments.
  • Rent, lease or mortgage payment for real property used for business purposes. (Ex. A storefront or warehouse. Does not include personal residence.)
  • Rent, lease or purchase payment for business property (Ex. delivery vehicle, food truck, kitchen equipment, technology, payment, and communications systems/equipment.)
  • Utility payments for business properties. (Not including personal residence.)
  • Cost of critical business operations. (Ex. raw materials, marketing expenses, etc.)
  • Personal Protective Equipment (PPE), sanitation supplies and equipment.

Businesses who receive grant funding will be required to document how the funds are used.

Before Applying

Business owners can complete their We Love Lufkin funding application more quickly by getting the following business documents in order:

  • Proof of employment. This will require one of the following documents: W-3 form (Transmittal of Wage and Tax Statements), 941 form, or other document showing payroll expenses, employer insurance expenses, or employer retirement expenses for the first quarter of 2020 (prior to the COVID-19 emergency declaration on March 17, 2020) as well as the most current version of this document.
  • Profit & Loss (P&L) statement for 2019, as well as a P&L statement as of May 2020.
  • For sole proprietors, applicants are required to provide a 2018 or 2019 Schedule C.
  • Documentation of minority ownership.

 

Frequently Asked Questions

GRANT ELIGIBILITY

  • Are there credit score requirements for this grant?

No. This grant does not take the credit score of the business owner into account before awarding the funds.

  • I’m not currently registered to do business with the State of Am I eligible?

No. All businesses must submit documentation with their application showing that they are a registered business. This can be in the form of one of the following documents:

Secretary of State Texas File number.

Employer Identification Number.

DBA

2018 or 2019 tax return (Return only, schedules not required.)

Individual Taxpayer Identification Number or Certificate of Filing.

Businesses will also be required to submit a completed W-9 form, proof of employment (such as a W-3 form, a 941 form, or other document showing payroll expenses, employer insurance expenses, or employer retirement expenses for the first quarter of 2020 (prior to the COVID-19 emergency declaration on March 20, 2020) as well as the most current version of this document. Businesses should prepare their Profit & Loss (P&L) statement for 2019, and a P&L statement that covers March 2020 and later, to demonstrate loss of profit due to COVID-19. If you’re a sole proprietor, you will be required to submit a 2018 or 2019 Schedule C.

All documentation is required for approval. If documentation is not provided with your application, you could be denied funding

  • Where can I get my Secretary of State Texas File number?

Your file number can be found on the Texas Comptroller website.

  • I’m self-employed. Am I eligible?

Yes. We Love Lufkin grants are available to self-employed individuals, independent contractors and sole proprietorships, in addition to small businesses and nonprofits serving the business community. Sole proprietors will need to provide a Schedule C tax form for either 2018 or 2019.

  • I just started my business. Am I eligible?

In order to be eligible for a We Love Lufkin grant, your business must have been operating as of September 1, 2019.

  • I operate my business out of my home. Am I eligible?

Possibly. Small businesses with less than 5 employees that operate out of the home are eligible for a grant. For larger businesses, funding priority will be given to for-profit businesses that operate out of a physical brick-and-mortar location within the City of Lufkin.

  • My business received funds from the Paycheck Protection Program (PPP) or an Economic Injury Disaster Loan (EIDL). Am I still eligible for these funds?

Yes, however, priority will be given to businesses that have not received funding through these programs.

  • Do existing debts disqualify me from applying?

No. Existing debt does not disqualify you from applying for a We Love Lufkin grant.

  • I’m the business owner, but I’m not a documented S. citizen. Am I eligible for this grant?

No. The CARES Act, which funds the We Love Lufkin grant program, only allows immigrants with Social Security Numbers to receive payments.

  • My business is a nonprofit, but its mission is not specific to the business community –such as a museum, or a church. Am I eligible for these funds?

No, funding is only for nonprofit organizations directly serving the business community.

APPLICATION PROCESS

  • I’m not sure how to demonstrate a reduction in sales/revenue or employment. What documents do I need for this?

Businesses should prepare their Profit & Loss (P&L) statement for 2019, and a P&L statement that covers March 2020 and later, to demonstrate loss of profit due to COVID-19.

All documentation is required for approval. If documentation is not provided with your application, you could be denied funding.

  • How much funding can I receive for my business?

Level I businesses with less than 5 employees (including owner) are eligible for a grant of $5,000.

Level II businesses (with 6-20 employees) are eligible for a grant of $7,500.

Level III businesses (with 21-40 employees) are eligible for a grant of $10,000.

Level IV businesses (with 41-50 employees) are eligible for a grant of $15,000.

* Employment numbers must be as of March 20, 2020. Does not include contractors.

  • I had to lay off employees as a result of COVID-19. Are these levels dependent on how many employees I have now? Or how many I had at the beginning of COVID-19?

This grant is based on the number of full-time employees (not including contractors) employed as of March 20, 2020, when Lufkin’s first emergency declaration took effect.

  • What if some of my employees are technically contractors? Do they still count toward the funds I’ll receive?

No. Contractors do not count as employees for purposes of this grant.

  • What does it mean for a business to be minority-owned?

It means that at least 51% of the business is owned, managed, and operated by a minority or group of minorities (e.g., Black Americans; Hispanic Americans; Native Americans; Asian Pacific Americans; or Subcontinent Asian Americans).

  • How do I verify minority ownership of my business?

There are several possible ways:

  1. Demonstrate registration on the Texas Certification Directory of the Texas Small Business Association;
  2. Demonstrate HUB certification in the State of Texas; or
  3. Submit documents that provide evidence of the applicant’s race or ethnicity, that the applicant is conducting the business as described, and owns, manages and controls the business.
  • Do I need to go through my bank or another financial institution to receive these funds?

No. Applications will be processed by processed with the help of members of the Hotel Occupancy Tax Board.

  • What may these funds be used for?

Grant funds may be used to reimburse the costs of business interruption due to COVID-19 as a result of required closures, voluntary closures to promote social distancing, or decreased customer demand. Examples of these costs include:

Working capital.

Machinery and equipment.

Payroll expenses.

Health care benefits.

Contract labor.

Supplier payments.

Rent, lease or mortgage payment for real property used for business purposes. (Ex. A storefront or warehouse. Does not include personal residence.)

Rent, lease or purchase payment for business property (Ex. delivery vehicle, food truck, kitchen equipment, technology, payment, and communications systems/equipment.)

Utility payments for business properties. (Not including personal residence.)

Cost of critical business operations. (Ex. raw materials, marketing expenses, etc.)

Personal Protective Equipment (PPE), sanitation supplies and equipment.

  • Do I need to document/report how I use these funds?

Yes. Business owners who receive this grant may be audited in the future and are required to document how the funds are used.

  • My business started feeling the effects of COVID-19 before March 19, 2020. Will that loss of sales/revenue be counted?

No. The grant only covers the impact from the date that Lufkin’s first emergency declaration took effect on March 20. 2020.

  • Are printed/mailed forms being accepted?
  • Mail-in applications are not being accepted at this time.
  • Where can I go for help with my application?

You may contact April Holcomb at Lufkin City Hall by calling 936-633-0251. She will assist business owners with their applications.

  • How soon will I hear back? How quickly will I receive my funds?

Grant applications will close Monday, July 20. Those who are not eligible for the grant should hear back by the end of July. All funds are expected to be distributed by the end of July.