Business Builder Subaward Grants

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Frequently Asked Questions

Q: Who is eligible to apply?

A: Small businesses (defined below) and nonprofit organizations located in or serving some or all of the five-state Heartland Center region (Iowa, Kansas, Missouri, Oklahoma, Nebraska) and its nine counties in northwest Arkansas (Benton, Carrol, Boone, Washington, Madison, Newton, Crawford, Franklin, Johnson).

Applicant businesses must qualify as “small,” defined as a business with fewer than 50 employees and less than $3 million in gross annual revenues. There is no size requirement for nonprofit organizations unless the project concerns a revenue-earning business enterprise, which must conform to the small business definition.

Nonprofits, or their fiscal sponsors, must have 501(c)(3), 501(c)(4), or 501(c)(6) status.

Q: How do I know if my project fits this Business Builder Subaward grant opportunity?

A: Key “fit” factors are type of business and planned outcomes.

Type: Business Builder Subaward grants are designed to support:

Farm, ranch, and value-added food businesses or nonprofits producing in, sourcing from, and focused on local and regional markets.
Food processors, aggregators, distributors, and retailers that source locally and/or serve multiple small- and mid-scale food and farm businesses.

Outcomes: Successful applicants will demonstrate how their project outcomes will help the Heartland Center achieve its desired outcomes. See “Desired Outcomes” section in the Request for Applications (RFA) in English or Spanish.

Highly encouraged are projects that are predominantly focused on starting or expanding a business project in the region through value-added opportunities, diversification of on-farm activities, expansion of access to new markets, and/or innovations to generate income.

Q: Are businesses with meat products eligible?

A: Activities related to making, storing, and selling meat products beyond slaughter and initial processing are eligible. Initial processing is up to the cutting, wrapping, boxing stage of processing.

Business Builder projects should focus on steps beyond the making of meat products, such as packaging and marketing.

Q: Do non-food businesses or projects fit?

A: Building a more resilient, diverse, and competitive food system is the purpose of USDA Regional Food Business Centers. Businesses and projects that are not food-focused are technically eligible but not priority.

Q: We serve the Heartland Center’s region, but we are not located in the region. Can we apply?

A: Yes. Applicants outside the region are eligible if they demonstrate that they conduct significant local food business in the designated Heartland Center region, whether sales of local food or relevant services to local farm and food businesses, such as distribution.

Q: What types of activities are eligible?

A: Eligible project activities include but are not limited to:

Business planning, feasibility studies, preparing loan applications.
Local food aggregation and distribution or food hub development.
Developing brand and marketing materials, including websites.
Market analysis, brokering services, and outreach to potential customers.
Marketing materials and supplies, and attendance at trade shows focused on local or regional markets.
Developing new products, labels, or packaging, including testing new formulations or recipes.
Improving processing, marketing, and distribution.
Legal support for business resilience, market risk management, and growth.
Training in food safety planning compliance for owners and/or employees.
Worker safety improvements, such as training staff, purchasing safety equipment.
Creating or expanding a farm stand, U-Pick, CSA, or other farm-direct sales platform.

Q: What is not eligible?

A: Ineligible activities include those that:

Are primarily for production-related expenses, such as farming guidance and production inputs (seeds, fertilizer, or ingredients for a value-added product).
Are related to meat and poultry slaughter and initial processing (value-added products beyond boxed meat, such as pemmican, jerkies, stews, and ready-to-eat meals are allowable.)
Are related to construction or purchasing land.
Depend upon the completion of another project or the receipt of another grant.
Duplicate activities in a project that has received a federal award from another federal program.

Q: Can an individual who has more than one business apply for each business separately?

A: A person who has multiple businesses is eligible to apply for the Business Builder grant for any or all of their businesses as long as each of these businesses are separate entities with their own IRS Employer Identification Number (EIN) and their own SAM.gov Financial Assistance Awards Only registration with associated Unique Entity Identifier (UEI). If they submit successful applications, each business with their own EIN and UEI is eligible to be awarded a cumulative total of $50K across one or more rounds of Business Builder grant funding. Submitting applications for more than one entity in any funding round will require a unique email address to create an account for each entity in order to submit more than one proposal in the Heartland Center’s online application system.

Q: Can I apply more than once?

A: Yes. Food and farm enterprises are welcome to apply multiple times but are limited to one application per round. The total amount received must not exceed $50,000, which is the maximum funding level for any one enterprise. The Heartland Center anticipates three rounds of Business Builder Subaward funding with estimated RFA release dates of August 15, 2024; January 15, 2025; and June 15, 2025. Applications are due 60 days after RFA release date.

Q: Applicants are eligible for 5 “technical assistance” bonus points. What is that? Do I need to do this before applying?

A: “Technical Assistance” (TA) includes help with business planning and development (including legal, finance, record keeping), assistance finding and navigating financial and other resources, market development support, and connecting with buyers, distributors, and others in the supply chain.

The Heartland Center offers 5 bonus points to applicants who explain how they have worked – within 12 months prior to application — with a business coach or similar provider of business assistance. For bonus points, the applicant will describe (250 words) how the technical assistance helped them: What issues or goals did you work on? What type of progress have you made to address the issues or reach the goals? Applicants are required to name the TA provider and organization.

Applicants should seek TA at least three weeks prior to application to improve chances of scheduling the needed time. Responses to last-minute requests are not guaranteed.

Steps:

Contact us for referral to a Heartland Center TA provider. Working with a non-Heartland Center TA provider within the past year also counts.

At minimum, the required TA consultation will last one hour (one or more sessions, virtual or in-person). During this time the TA provider and applicant will work through basic business and project questions.

Q: What do I need from SAM.gov? When do I need it?

A: Applicants MUST complete a “Financial Assistance Awards Only” registration in SAM.gov and provide the Unique Entity Identifier (UEI) associated with this registration.

Applicants can provide the required UEI either at the time of application or if/when the Heartland Center informs them that they are a finalist. Having the required registration and/or UEI at the time of application will have no bearing on application review.

It is best to start the registration process as soon as possible to avoid processing delay. It is acceptable to provide the associated UEI while registration activation is pending (approximately 20 days).

NOTE: You will receive the required UEI at Step 8 in the process (see below). The “Financial Assistance Awards Only” registration will become active within 15-20 days after submittal (Step 10). Notification comes after an approval process (Steps 11-12).

Please see Heartland Center Step-by-Step Guidance (English and Spanish). See also the SAM.gov Entity Registration Checklist (Financial Assistance Awards Only section).

The process is free. The System for Award Management (SAM.gov) is an official website of the U.S. government used to verify entities (businesses, individuals, organizations) for contracts and funding.

Q: I already have a UEI but no SAM.gov registration. What do I do now?

If you already have a UEI from SAM.gov, you still need to accomplish the “Financial Assistance Awards Only” registration. It is required for Business Builder finalists to be funded (see previous question).

How to add registration to UEI only status:

Log in to SAM.gov and go to your workspace. You should see your entity and its status as “ID assigned.”
From your entity record, select the Actions menu (the three dots) near the expiration date, and select Register.
You will then answer registration questions and proceed.
See the Heartland Center Step-by-Step Guidance (English and Spanish). See also SAM.gov guidance “If I already have my Unique Entity ID, how do I register my entity – Article KB0062625.”

Q: What if English is not my first language?

A: The Heartland Center is ready for Spanish-language applicants and will work to accommodate other non-English speakers.

For Spanish-language applicants:

Application materials are available in Spanish.
Enterprises may submit applications in Spanish.
Spanish-language applications will be reviewed by qualified Spanish-speaker reviewers.

Other non-English speakers should contact us at hrfbc@newgrowthmo.org as soon as possible for assistance.

Q: Are equipment purchases, including vehicles, allowed under the Business Builder Subaward grant program?

A: Business Builder subawardees may purchase special purpose equipment if the equipment serves a technical purpose supporting program goals. For the Business Builder program, special purpose equipment purchases that support producer access to new markets and/or benefit local and regional supply chains are generally allowable. Special purpose equipment purchases (new or used) may support:

1. Transportation, processing, aggregation, or storage investments;

2. Value chain/supply chain innovation or upgrades, including equipment or technology upgrades or investments to support process adaptations; and,

3. Product development, packaging, and marketing of agricultural products.

All such special purpose equipment purchases must be used only for the stated purposes. They must also be justified in the applicant’s description of the project and budget. Include detailed equipment specifications as much as possible to make clear what it is you propose to purchase (See RFA Appendix D: Sample Budget: English, Spanish).

Equipment purchased by Business Builder subawardees must be approved and monitored by grant administrator the University of Nebraska Lincoln (UNL), as required by 2 CFR § 200.313.

Q: Is general purpose equipment allowable, such as chairs and desks for the office or tables and tents at a farmers’ market?

A: General purpose equipment is equipment that is not limited to research, medical, scientific or other technical activities. Business Builder Subaward funds can be used to rent or lease general purpose equipment but cannot be used to purchase general purpose equipment or have a lease-to-own agreement.

Q: Do I need to provide competitive bids for purchases?

A: If funded, subawardees will be required to submit 3 competitive pricing or rate quotes for equipment and contractual items $10,000 and greater. Pricing and rate quotes (2-3) are also recommended for purchases less than $10,000. No pricing or rate quotes are needed for purchases less than $5,000.

Sole source purchases are possible. A sole source purchase is one where only one vendor can provide an item or service, so it is not possible to obtain competitive bids. The applicant must provide written justification and obtain approval from grant administrator UNL before purchasing.

Q: What happens to equipment after the grant ends?

A: No action is needed at the time of closeout if equipment acquired with Business Builder subaward funds continues to be used for the original project, program, or related activities.

When equipment is no longer in use, and the value of the equipment falls below a fair market value of $5,000, the Business Builder subawardee may retain, sell, or otherwise dispose of the item with no further responsibility.

For equipment no longer in use with a fair market value greater than $5,000, the Business Builder subawardee will work with grant administrator UNL to follow UNL guidelines for equipment disbursement.

Q: Will this grant pay for items already purchased?

A: The grant will not cover any prior purchases. All expenses outlined in the project plan and budget must be made only after completing the Business Builder Subaward agreement with grant administrator UNL. This is a contractual step that takes place soon after award notification.

Q: Are construction costs allowable?

A: Construction costs are not allowed. The only exception is installation of certain required equipment, such as wash tanks or coolers. Note: Applicants who request funding for such equipment should already have a location available for installation.

For Business Builder subawards, minor improvements, rearrangements, or alterations of an existing building or facility to accommodate new or upgraded special purpose equipment are allowable. Building related materials and labor are allowable if they are needed for special purpose equipment.

If the minor renovations involve any of the below, the project is unallowable as it will require a National Environmental Policy Act (NEPA) review.

Ground disturbing activities;
Vegetation or habitat removal;
Alter a structure greater than 50-years of age or the general aesthetic of the property;
An adjacent river, stream, or water body;
Permanent increase in noise, odor, or traffic as a result of the project;
Increase emissions of carbon dioxide, methane, and/or nitrous oxide (increased use of internal combustion engines, manure management, etc.)

Q: When and how do I receive money to cover expenses?

A: The Business Builder Subaward is a reimbursement grant. That means subawardees must pay for budgeted goods and services before they can request funds from grant administrator UNL to cover those expenses.

Once awarded, subawardees will receive an orientation and support materials regarding the reimbursement process. Subawardees may claim expenses by submitting invoices, with documentation, for reimbursement. Documentation includes itemized receipts for purchases; event information, such as agenda, for attendance at trainings, trade shows and the like; and pricing/rate quote information for purchases $5,000 and above (more detail in Question: Do I need to provide competitive bids for purchases?).

Subawardees must submit invoices at least quarterly. Monthly is highly encouraged to avoid losing track of documentation you will need. The turnaround time for payment from UNL is three to four weeks after subawardees submit invoices that are complete and include documentation.

See RFA Appendix C: Sample Invoice and Documentation. English, Spanish

Q: What if I cannot afford to wait for reimbursement?

Subawardees who are “loan ready” may want to seek financing from a third party to cover expenses ahead of reimbursement and/or pay for other project costs. In those cases, the Business Builder Subaward agreement, which subawardees receive from grant administrator UNL to finalize the award, may be helpful as a guaranteed source of income (contract).

Getting a loan, however, is not always advisable. It involves taking on debt; it must be re-paid. Loans also include fees and interest.

Loan readiness includes a credit score and business track record that fit a lender’s requirements. Different lenders have different requirements. Most lenders are unfamiliar with financing small food and farm businesses in local and regional food markets. Some community development lenders are more flexible than banks.

Should you decide to explore financing, work with a technical assistance provider to assess your readiness and prepare. Connect with a Heartland Center TA provider.

Resources for finding community development lenders include:

Q: Are Business Builder Subaward grants taxable?

A: Business Builder Subawards are considered taxable income. However, use of the grant funds will typically offset this income and produce a minor net tax effect, if any. Factors include depreciation, what the funds are used for, when the funds are used, and when the grant funds are received.

Subawardees should consult a tax professional, because individual circumstances are unique. More information is also available at the Farmers.gov resource page, “Taxes for Farmers and Ranchers” and in the following video.

Q: Where do I go with other questions?

A: All questions about the Business Builder Subaward RFA, including allowable costs, should go to the Heartland Center’s general email address: hrfbc@newgrowthmo.org. Our team will monitor this inbox and answer questions ASAP. We will also update this FAQ document ongoing based on incoming questions.