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Small Business Recovery Grant Program

Small Business Recovery Grant Program FAQs

Below is a list of Frequently Asked Questions about the FHLBNY’s COVID-19 Small Business Recovery Grant program. In many cases, the answers are shorthand clarifications. The full detail and the governing rules can be found in the COVID-19 SBRG Program Guidelines. If further clarifications are needed, please contact [email protected].


Select a heading to view questions and answers:

Questions Answers
Who selects the recipients in the program? Recipients are identified by members of the Federal Home Loan Bank of New York. Those members will collect all documentation to substantiate recipients’ eligibility and then submit applications to the FHLBNY.
Can an organization receive a grant through an FHLBNY member if it is not one of that institution’s customers? Yes. Members that choose to participate in the program are encouraged to identify recipients among their customers and in the communities they serve that are most in need of grant funds to support their employees and their operations.
What types of entities can receive funding? Small businesses and non-profit organizations located in the FHLBNY’s district (New York, New Jersey, Puerto Rico and the U.S. Virgin Islands) can receive funding.
How is eligibility determined for small businesses? Businesses that meet Small Business Administration criteria, based on their revenue or number of employees, depending on industry, are eligible. Members will use businesses’ audited financials or tax returns for 2019 or 2020 to make.
The SBA site doesn’t have a size standard in number of employees for every business type. Is there a default number that we should be using or does it necessitate the use of size in receipts? In some cases, SBA only allows the qualification based on the average annual receipts/revenue rather than the number of employees. In this case, the business will have to be qualified based on the number of receipts rather than the number of employees. Per the SBA website, the “average annual receipts/revenue is generally calculated as the total receipts/revenue or total income plus cost of goods sold (including all affiliates, if any) over the latest completed three (3) fiscal years divided by three (3).”
How is eligibility determined for non-profit organizations? In order to qualify for the grant, non-profits must have: an active 501(c)(3) (or other equivalent non-profit tax designation); an annual operating budget of less than $20 million, and must demonstrate a documented decrease in revenue as described in the Program Guidelines.
Why are non-profit organizations included in a program for small businesses?Non-profits provide many of the essential healthcare and other social services to residents in the district, and they are often mission-driven in ways that support low-income populations. These organizations have lost revenue in the crisis because they are unable to offer income-generating activities, they are unable to continue normal fundraising initiatives, and they may not have access to other emergency liquidity programs intended for small businesses.
Can a small business or non-profit receive multiple grants from one or more than one member?No, there is a limit to one grant per business or non-profit. Members are responsible for confirming that a business or non-profit has not applied for the grant with other members and have not received a grant with them in the past. However, if a small business or non-profit receives a PPP loan, it does not make them ineligible for the grant.
Does the program provide grants to sole-proprietorships? Sole proprietors may indeed qualify under the SBA criteria. Please consult with those criteria; a link is provided in the Program Guidelines and the SBRG Application and Funding Request Form.
Does the program provide grants to gig economy workers?Contractors and part-time employees of large corporations will not benefit from the grant because it is the business owner’s name that will be on the grant application to the FHLBNY.
Can a member apply for a grant for a subsidiary?Can a member apply for a grant for another member’s subsidiary? No, subsidiaries of members are not eligible to receive a grant under the SBRG Program.
Can small businesses that are also franchises of larger corporations qualify for the program?Yes. These small businesses serve their employees and communities in many ways that make them similar to independent entities. However, in the Program Guidelines, participating members are encouraged to seek out recipients that do not have easy access to affordable emergency capital. Franchises that could benefit from significant support from their parent organization during the crisis are discouraged from applying.
What documentation is required to prove that a small business or non-profit has suffered a financial loss because of COVID-19? Both types of recipients are required to demonstrate a 25% decrease in revenue, measured by comparing a period of 2 years of revenue 2019 vs 2020. Evidence can include cash-flow statements, point-of-sales reports, bank statements, quarterly sales tax filings, and CPA-certified profit and loss statements.
Does the organization need to remain in operation during the crisis? No, not necessarily. Many businesses are shut down by state or local orders, and still others are on hiatus out of concern for the safety of their staff and customers. The grant funds may make it possible for temporarily suspended businesses to continue to pay employees and benefits or to plan to resume operations and rehire staff when the crisis eases.
Does the organization need to remain viable following the crisis?No, not necessarily. Small businesses are finding it difficult to plan, since there is extreme uncertainty about the business environment during the crisis or following it. Hence it may be challenging for participating members to assess the reasonableness of a business’s plans for reopening. In such cases, members are encouraged to consider the intent of the program and the suggested eligible uses of funds.
However, if a business or its owner is the debtor in a bankruptcy proceeding at the time of the member’s application, that business is ineligible for the program.
Questions Answers
Is the money in the form of a grant or a loan? The program issues grant funds. Once the FHLBNY approves a given recipient, it disburses the designated amount of funds to its member, which then passes along the grant to the recipient. The agreement between the FHLBNY and the member allows the FHLBNY to recapture funds in case of noncompliance by the member with the Program Guidelines.
How is the amount of the grant determined for each recipient?Each small business or non-profit organization, only if they have not received SBRG funds in the past, may receive up to $10,000 and may only be submitted by one member. Each member may decide to offer a lower flat grant amount or calibrate each grant to the recipient’s size or need. Such determination is at the sole discretion of the participating members.
What are the eligible uses of grant funds?The intended purpose of the grant is to provide emergency cash assistance to small businesses and non-profits to cover personnel costs related to COVID-19, equipment to comply with public health measures designed to slow the spread of COVID-19, and working capital. Refer to the Program Guidelines for a list of eligible uses of funds.
Can the funds be used to reimburse expenses already incurred prior to application? Yes. For example, a small business may have used available sources of credit to purchase equipment to allow its employees to work remotely and safely. Grant funds could be used to pay back such debt.
Can the funds be used to allow the recipient to take out new loans or other credit products? Yes. The grant may allow a recipient to restore its assets that were depleted by emergency spending and hence qualify for a line of credit (from a member or otherwise) that could sustain the organization after the crisis. Such a decision would allow that entity to resume its prior level of operations and support its employees.
What documentation will the FHLBNY review regarding each grant recipient? It is the member’s responsibility to collect, verify and retain all documentation required to determine the eligibility of the recipient and its designated use of funds. The program application requires the member to submit summary information gathered from the documents, but not the documents themselves. Each application submission from the member will include a certification from an authorized representative to the accuracy of the information and the member’s compliance with the Program Guidelines.
Questions Answers
Where do the funds for the COVID-19 Small Business Recovery Grant come from? The SBRG is a discretionary program, approved by the Federal Home Loan Bank of New York’s Board of Directors, and funded out of the FHLBNY’s earnings.
Which financial institutions are participating in the program? The FHLBNY website has a Member Listing; however, not all members may decide to participle in the SBRG. Participating members have the option to be listed on the page for the program and to designate a contact person.
How much funding is available, and when will the program stop accepting applications from FHLBNY members? The total funding available through this most recent funding round is $3 million, and the program will terminate when the funds are exhausted or on October 31, 2021, whichever is earlier.
What is the process for members to receive program funds and distribute them to eligible recipients? Step 1: Member issues a request for a batch of program funds (up to $100,000 based on availability). The FHLBNY will review requests received on a first-come/first-served basis. Note that for the 2020 and 2021 SBRG program rounds, a Member may qualify for a maximum grant of up to $350,000.
Step 2: Member has 30 calendar days to find, qualify, and certify recipients for an amount not exceeding the approved batch. Member submits a complete funding request to the FHLBNY. Supporting documentation is maintained by the member.
Step 3: The FHLBNY reviews the request and issues grant funds to the member’s Overnight Investment Account at the FHLBNY. Any deficiencies must be rectified within 7 business days before funds are disbursed.
Step 4: Member may then request another batch of funds, pending availability. It should be noted that small businesses and non-profit organizations that previously received funding from any Member under the SBRG program are prohibited from receiving any additional funds under this program round.
For more detail on this process, see the Program Guidelines.
If the 30th calendar day of the reserved batch of funds falls on a weekend or a holiday, when does the Member need to submit the SBRG Application and Funding Request Form(s)? If the 30th calendar day of an approved batch of funds falls on a weekend or a bank holiday, members may submit the SBRG Application and Funding Request Form(s) by close of business on the following business day.
How are grant funds dispersed across the FHLBNY District? Out of the overall program budget for this round of $3 million, $1.5 million will be reserved for recipients in New York, $1,050,000 for New Jersey, and $450,000 for Puerto Rico and the U.S. Virgin Islands.
How are grant funds dispersed across the participating members? No individual member may issue grants that total more than $350,000. A member that utilizes this full amount must use at least $35,000 for recipients that are non-profits and/or are located on tribal land.
How does the program ensure that non-profit organizations receive grant funding? Within each state/territory, at least 10% of program funds must be directed to non-profit organizations and/or entities located on tribal land (small businesses or non-profits). When a member submits a request for a batch of program funds, it must designate the amount of funds it expects to direct to each geography and type of recipient.
How do members know the amount of remaining program funds? The FHLBNY will update its website, generally once per week, with the available funds for each geography and type of recipient. Members may at any time e-mail the FHLBNY for their program usage and availability of funds.