The Amherst Chamber of Commerce will launch a program today, offering small businesses grants of up to $25,000 for a range of purposes.
The new Small Business Grants Program is open to small businesses that have been operating for at least three years. The money, ranging from $5,000 to $25,000, can be used for "anything from marketing to hiring to going green to infrastructure costs," said Colleen DiPirro, president and chief executive officer of the Amherst Chamber.
The program is aimed at businesses with fewer than 50 employees, but "the smaller, the better," she said.
"We don't want to give it to a company that's doing $50 million worth of business and wants to add a salesman to go on the road," DiPirro said. "We want it to be meaningful."
The business also does not have to be located in Amherst, but must be a member of the Amherst Chamber of Commerce. Since the money comes from the activities of members, "it wouldn't be fair to use Chamber member revenues to go to nonmembers," she added.
Still, the Chamber's membership base is broad, with about 35 percent of members located outside Amherst, and the membership fee for businesses with fewer than 10 employees is $195 a year.
The program will be funded through the Chamber's "residual" programs, in which the Chamber endorses a product or service provided by a particular member, who then offers it to other Chamber members with a discount or other added value. The Chamber then gets a fee from the provider for each sale of that product or service.
Many Chambers of Commerce have similar programs. In the past, revenues from such residual programs went into the Amherst Chamber's operating budget, DiPirro said. Now, however, all residual payments will go into a fund to support the grants program, she explained.
DiPirro said the Chamber expects to give out about $100,000 in grants in the first year.
She said she was not aware of any one else offering a similar benefit.
"I think it's got huge potential. I'm quite excited about it," she said. "It's not just another smoke-and-mirrors program."
The program will be formally unveiled tonight, during the grand opening of the KeyBank branch at North French and Transit roads in East Amherst.
"The program from my perspective would be needed," said Andrea Lizak, associate director and business adviser at the Small Business Development Center at Buffalo State College. "There is a need for this."
The new program targets a persistent challenge for small businesses, especially newer ones: how to get the money to finance not only operations but growth. Small companies often struggle to obtain affordable funding from banks, which are increasingly reticent about lending money to borrowers without track records, and the other options, such as investors, are somewhat limited for small businesses.
"I've been here 29 years, and there hasn't been a week that has gone by that I haven't had a small business ask me if there's any grants for small business," DiPirro said. "And there's no way to identify funding opportunities."
Currently, the residuals program has three participating vendors: National Fuel's new program for member firms and their employees; Metrodata, which provides background checks at discounts for Chamber members; and CoreIT, which offers technology assessments for small businesses.
In the past, residuals have yielded $60,000 to $70,000 just from a single individual program, so DiPirro said she was confident about having the money to support the grants.
Initially, however, the Chamber will contribute $1,000 in seed money, and officials are encouraging area foundations to provide funding as well. Some foundations also might offer a match on residuals.
Grant applications are available online and at the Chamber's office. A committee will review them twice a year, in October and February.