Equity Grants & Financing

DESCRIPTION:

  • Equity grants/financing reduces the capital outlay for a project without increasing debt.
  • Equity grants/financing comes in the form of direct cash contributions, gifts or sales at below market prices for public land and/or buildings.

FUNCTION:

  • Equity financing reduces the need for borrowing, which improves project cash flow and strengthens collateral coverage.
  • Projects with equity grants may attract investors with limited commitment to the project since equity grants are not investor funding.
  • Equity financing and venture capital are used to generate money for business projects in return for an equity share of a company.

QUALIFICATION AND USE CRITERIA:

  • To be eligible for an equity grant, projects must contribute to local housing and commercial revitalization efforts.
  • Other requirements may be associated with equity grants such as bringing the property up to code, rehabilitating the facade, etc.
  • Occasionally other rules apply such as urban homesteading programs where sales prices may be set at one dollar.

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PROGRAM STRUCTURE:

  • Equity grants are usually negotiated with the grantor and are often used in conjunction with other enhancements.

DOWNLOADABLE DOCUMENTS (PDF):

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