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Montgomery County weighs reallocation of $3.015 million in ARPA small-business funds, adopts new readiness-focused program
Summary
HOPE Credit Union recommended de-obligating $3,015,000 from a stalled forgivable-loan program; county staff and partners proposed a new SBOSS-run Vibrant Small Business Pathways program to shift from loan-first to readiness-to-activation grants and technical assistance.
Montgomery County commissioners on March 3 reviewed recommendations to reallocate more than $3 million in American Rescue Plan Act (ARPA) funds originally earmarked for forgivable loans to local small businesses.
A memo from HOPE Credit Union reported that the forgivable-loan component of the Montgomery Small Business Support Program had yielded only one deployed forgivable loan to date and recommended de-obligating $3,015,000 so the funds can be used for other eligible purposes. The memo said the county previously advanced $225,000 to the loan program, of which about $85,000 has been spent and roughly $140,000 remains to process pipeline applications through the end of Q1 2026.
County staff and program partners proposed a replacement approach, “Vibrant Small Business Pathways,” to be administered by SBOSS (Small Business One-Stop Shop) with Access Montgomery and the city’s economic development office. The program emphasizes a readiness-first model: businesses would complete financial- and compliance‑readiness milestones before receiving milestone-based capital. Program materials set award sizes at $10,000–$100,000 (preferred awards $25,000+), estimate serving 35–55 businesses, and require all funded activities be completed by Nov. 30, 2026.
The proposal shifts funds from a loan-heavy model — which staff said was hindered by applicants’ incomplete tax or financial records and ARPA-specific COVID‑impact requirements — to capacity building and direct vendor payments (build-outs, ADA work, POS and marketing, lease support). Program documents describe Phase 1 screening and assessment, an optional Phase 2 capacity-building stage to resolve financial gaps (tax filings, bookkeeping, financial statements) and Phase 3 milestone-based capital deployment.
The Commission did not vote to reallocate funds during the March 3 meeting; an amendment to the ARPA Montgomery Thrive Small Business Program was carried over to a future agenda for further review.
Why it matters: The proposed pivot aims to increase readiness among Montgomery small businesses so public funds can be deployed more quickly and with documented compliance to federal ARPA rules. The county must also meet federal expenditure deadlines tied to ARPA funds.
