Montgomery County to reallocate $3.02 million in ARPA small‑business funds to SBOSS readiness program after low loan uptake

Montgomery County officials circulated a memo dated March 17, 2026, proposing that the county re‑obligate remaining ARPA small‑business funds to a SBOSS‑administered capacity‑building program called Vibrant Small Business Pathways, the memo states. The amendment to the county’s ARPA subrecipient agreement with Gaitway Solutions formalizes the program administration and budget changes.

The recommendation to de‑obligate $3,015,000 came in a separate report from HOPE Enterprise Corporation to county and city staff. Danielle J. Ware, Executive Vice President and Chief Lending Officer at HOPE, wrote that HOPE recommends Montgomery "deobligate $3,015,000.00 of its subaward and reallocate the funds to another eligible purpose" after reporting very limited loan deployment under the original forgivable‑loan model.

HOPE’s report documents the original subaward structure and low program conversion. The subaward totaled $3.24 million, funded equally by the City of Montgomery and Montgomery County; $2.7 million had been budgeted for forgivable loans intended to support up to 50 borrowers at a maximum loan size of $250,000 and a forgivable portion capped at $75,000 per loan. As of the end of 2025, HOPE reported 46 eligibility surveys completed, 13 loan applications started, 8 completed, 4 denied, 2 approved and only 1 forgivable loan deployed for $37,500 of forgivable funds (total loan $75,000). HOPE attributed low deployment to incomplete applications, missing tax and financial documentation, insufficient net income to qualify, and ARPA requirements for demonstrating COVID‑19 impact.

The proposed replacement program, Vibrant Small Business Pathways, shifts from a capital‑first approach to a readiness‑to‑activation model. Under the program outlined in Exhibit A of the amended agreement, SBOSS (Small Business One‑Stop Shop) will administer a three‑phase structure: Phase 1 screening and assessment; Phase 2 capacity‑building (when gaps are identified); and Phase 3 milestone‑based capital deployment. Eligible uses are limited to vendor or landlord payments for improvements, equipment, lease support and professional services; direct cash transfers to owners, debt refinancing and speculative real estate purchases are listed as ineligible.

Key program parameters in the amendment and exhibits include: an award range of $10,000–$100,000 (with preferred awards of $25,000+ after readiness); an estimated 35–55 businesses served; an average award of $50,000–$75,000; and a program completion deadline requiring that all funded activities be completed and expended by November 30, 2026. The amended agreement replaces the original budget with Exhibit B and authorizes advance payments for allowable program costs, subject to reporting and ARPA compliance. Gaitway Solutions, LLC is named as the subrecipient/contractor responsible for grant administration and technical assistance under the amended terms.

The contract language also sets a minimum subrecipient performance metric: assist a minimum of 25 eligible small businesses through application support, grant award administration and related capacity‑building activities. The amendment is dated effective February 17, 2026, and signature blocks for the City of Montgomery, Montgomery County and Gaitway Solutions appear in the agreement.

HOPE’s memo also notes prior disbursements and pipeline handling: Montgomery previously advanced $225,000 to HOPE; approximately $85,000 had been expended as of the memo, and HOPE proposed using remaining available funds (about $140,000) to process pipeline applications through the end of Q1 2026, returning any unspent funds thereafter.

Next steps recorded in the documentation include finalizing the amended agreement (execution by the parties is required) and implementing the SBOSS‑administered Vibrant Small Business Pathways program, with SBOSS and the City Department of Economic Development listed as program partners. The documents do not record a formal County Commission vote or action in the transcript provided; they show the proposed amendment, supporting HOPE memo, and budget modification materials for administrative consideration.