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Downstate Small Business Stabilization Program

Grants to Illinois Local Agencies to Provide Financial
Assistance to Eligible Businesses Impacted by COVID-19

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Funding Source:

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Illinois Department of Commerce and Economic Opportunity (DCEO), Office of Community Development

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Grants of up to $25,000 to Illinois local units of government in eligible regions to provide financial assistance to eligible businesses impacted by the Coronavirus (COVID-19) crisis. Applicants must conduct a public hearing prior to applying. Funding is intended to provide for the working capital expenses of businesses, including employee salaries, general operating expenses, inventory, and advertising and marketing expenses. Municipalities must not be a HUD direct Entitlement community or be located in an urban county that receives "entitlement" funds.

​With the outbreak of the COVID-19 virus and its detrimental impact on small businesses, the State is invoking its option to adjust Community Development Block Grant allocations to address specific needs to benefit Illinois’ non-entitlement communities in case of unforeseen circumstances.

These funds may be used to assist private for-profit small retail and service businesses, or businesses considered non-essential by the Governor’s Executive Order without the ability for employees to work remotely. Businesses must have at least one full-time equivalent (FTE) employee other than the owner(s) but must not exceed 50 employees (total number of people employed) including the business owner(s).  

To ensure that the State-administered program meets the intent of the federal Housing and Community Development Act of 1974, as amended, benefiting businesses of the Downstate Small Business Stabilization Grant must meet the national objective of Urgent Need. To demonstrate, businesses must have been operating continuously with the same ownership since January 1, 2017 (at a minimum) and provide documentation on the financial health of the business in 2017, 2018, 2019 and currently.  This documentation will be available to the public as part of the application process and is subject to FOIA. Benefiting businesses should have solid commitments to remain open or reopen,and retain or re-employ permanent jobs. 

GrantWatch ID#:

GrantWatch ID#: 189318

Estimated Total Program Funding:


Number of Grants:


Estimated Size of Grant:

The program component makes funds available for 60 days of verifiable working capital up to a grant ceiling of $25,000.

Term of Contract:

A grant agreement will be issued to the local government for a contract period of twelve months. All grants must meet the National Objective of Urgent Need for the benefiting business. If circumstances beyond a grantee’s control are apparent and impact the project, a grantee may apply for an extension, which may, or may not be granted. No more than one six-month extension may be considered.

Additional Eligibility Criteria:

Applications must be submitted by a unit of local government recognized by the Illinois Constitution and able to support economic development activities on a sufficient scale. This includes cities, villages, and counties. Municipalities must not be a HUD direct Entitlement community or be located in an urban county that receives "entitlement" funds (see list in program Guidebook).

Businesses cannot apply directly to DCEO for assistance and grant awards will not be made directly to the business.

The following businesses are specifically ineligible for assistance:

- Businesses that have both essential and non-essential activities.
- Not-for-profit businesses.
- Independent contractors.
- Franchises or chain businesses.
- As this grant is federally funded, businesses that involve the use of cannabis for medical and/or recreational purposes are not eligible to apply.
- Private club or business that limits membership for reasons other than capacity.
- A business that derives at least 33% of its gross annual revenue from legal gambling activities, unless, subject to the Department’s approval, the business is a restaurant with gaming terminals.
- Business engaged in manufacturing or selling at wholesale, tobacco products, vaping, liquor or sexually explicit materials or in the business of manufacturing or selling firearms at wholesale or retail.
- Liquor store, an adult bookstore, non-therapeutic massage parlor, strip club or nightclub
- Pawn Shops
- Storage facility, trailer-storage yard or junk yard
- Businesses owned by public officials or state employees who are paid at least 60% of the governor’s salary; their spouses, and their minor children.
- An establishment similar to any enumerated above; or
- Any other business subsequently deemed ineligible by the U.S. Department of Housing and Urban Development.

For a list of ineligible communities, see page 4 of the Guidebook in Supporting Documents below.

Pre-Application Information:

Final date to apply: February 26, 2021

Public Hearing requirement:

- A public hearing must be held prior to submission of an application and prior to passage of a local council resolution of support by the local governing body.
- NOTE: To reduce the potential for spread of COVID-19, public hearings may include virtual public hearings (alone, or in concert with an in-person hearing) if it allows questions in real time, with answers coming directly from the elected representatives to all “attendees.”
- A Notice of Public Hearing must be published at least once in a newspaper of general circulation at least seven calendar days (excluding the date of publication and the date of the hearing) prior to the public hearing.NOTE: One public hearing may cover multiple applications; information concerning each application must be included in the Notice of Public Hearing.

Under the Grant Accountability & Transparency Act (GATA), all applicants (the local government) must register with the State of Illinois via the “Grantee Portal” at and be pre-qualified prior to application. Failure to register prior to application will result in a determination of “Do Not Fund”.

All grantees are required to be registered in the System for Award Management (SAM) at www.sam.govfor the purpose of obtaining a Commercial or Government Entity (CAGE) Code.

Applications will be made “in support of” the benefiting business and funds will be passed through to the business via a Participation Agreement.


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Contact Information:

Before starting your grant application, please review the funding source's website listed below for updates/changes/addendums/conferences/LOIs.

To avoid the spread of COVID-19, all applications must be submitted by scanning in the required documents and e-mailing them to:

For technical assistance, please reach out to the grant manager in your area (see Supporting Documents below), email the above email address, or call the Office of Community Development at 217/785-6174.

Agency Contact
Wendy Bell (

Funding or Pin Number:

CSFA Number 420-75-2398

URL for Full Text (RFP):

Geographic Focus:

USA: Illinois: Municipalities must not be a HUD direct Entitlement community or be located in an urban county that receives "entitlement" funds.

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