Community Development Block Grant Program/Economic

The Small Cities Community Development Block Grant (CDBG) economic development program is a source of financing for companies that are expanding an existing facility or starting a new operation in the non-metropolitan areas of Kansas. The maximum amount of funds available is $750,000 per project.

There are two parts to the program: business finance and infrastructure.

  • Business: Under the business finance component, funds are available for working capital, machinery and equipment and real property. The interest rate is currently set at four percent. The term of the loan is based on the class of the asset being financed. The working capital loan has a term of five years, machinery and equipment 10 years and real property 15 years.
  • Infrastructure: Under the infrastructure component, funding is available for water lines, sewer lines, roads, rail spurs and pre-treatment facilities. Infrastructure funding requires that 25 percent of the funds be paid back over a 10-year period at a rate of zero percent. This is accomplished through a special assessment placed on the real property.

In order to obtain the funds, the city or county governing body applies on behalf of the private business. Applications are accepted from January 1 through December 10. Funding requires the creation or retention of one full-time job per $35,000 of CDBG assistance up to the maximum of $750,000. At least 51 percent of the jobs created or retained must meet HUD’s low- and moderate-income (LMI) test, which is based on median family income in the county in which the project is located.

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