By: Micki Vandeloo, President, Lakeview Consulting
As we enter the final months of 2023, I thought I would end the year answering some of the most common questions I received in my webinars, conference presentations and conversations with manufacturers this year.
Question: Are there manufacturing grants for reshoring?
Answer: This was by far the most common grant question this year! With all the publicity about reshoring and the impact of the pandemic on American supply chains, you would have thought there would be grants to support reshoring everywhere! However, as explained in my previous article on this subject, at the federal level, these grants were offered as “manufacturing expansion grants” for industrial sectors that were most adversely impacted by the pandemic and for high priority, climate related sectors. As of the writing of this article, these grants continue to be released and I expect that to continue into 2024.
Many states have also used their ARPA funds to support manufacturing expansion projects for reshoring product. Some of these are actually called “reshoring” grants, but many are more generally named.
Question: How long does it take to research manufacturing grants?
Answer: When manufacturers hire us to research grants, we ask them to complete a Grant Research Questionnaire. Once that is complete, we schedule a kickoff call (usually within a week) and, after that call, we start the research process. All told, the process from beginning to end (depending on the time it takes for the client to complete the questionnaire) is from 4-6 weeks.
Question: What if you can’t find a grant to support our work?
Answer: Fortunately, we have not had this problem! Every state offers grants to fund common manufacturing activities such as training and exporting. If this were ever to happen, we would certainly refund payments made by the client!
Question: We are building a new facility. What grants are available to us?
Answer: The answer is…it depends. If you are adding new jobs with the new facility, you may qualify for state funding from the Economic Development department. This is typically termed “discretionary funding” and the amount is negotiated between the state and the manufacturer. These can be large grants but the amount is dependent on many factors, including the level of capital and facility investment, the number of new jobs created and jobs retained, the number of states that are competing for your project and the amount of money available in state coffers for these grants.
Question: We are adding solar (or energy efficiency improvements) to our facility, and it is expensive. Is there a grant to offset this investment?
Answer: If you are a manufacturer located in a USDA eligible area, your solar installation or energy efficiency improvements may qualify for funding through the Rural Energy for America program (REAP). This program currently funds up to 50% of the cost of a renewable energy project (solar, wind, geothermal, biomass, etc) up to $1,000,000 and up to 50% of the cost of an energy efficiency project up to $500,000. However, if the energy efficiency project is in a new building, the REAP funding will not pay for that as there is no utility history from which to create an energy usage baseline to calculate the payback period for the efficiency improvements. Typically, any facility will have to produce at least 12 months of utility bills to get an energy efficiency study conducted.
Question: Our facility is in an Opportunity Zone. Do we qualify for manufacturing grants based on this?
Answer: The real advantage of Opportunity Zones are typically the tax savings that are offered to companies investing in these areas. However, as many of these locations are considered “underserved” or “low income”, they may qualify for increased levels of grant funding for training individuals hired in an Opportunity Zone.
Question: How do you get compensated for your services?
Answer: We charge a flat fee for our services and the cost is based on the amount of time we expect to spend on the project. We do not take a percentage of the grant, as that is unethical and the grant writing fees are not typically covered by a grant.
Question: How much time will our team have to invest in the manufacturing grant process?
Answer: While we work very hard to minimize the time your team needs to supply information that we need for research and to write applications, we do need information from our clients to write the most competitive application possible. We have created forms to collect information in a simple manner, and you can expect that the information needed will reduce as we continue to work with your company to access funding, as much of the information supplied can be reused for various grant applications. We also may need ½ hour of your time on a weekly or bi-weekly basis to update progress when working on larger grants. All in all, the estimated time required from our clients on an ongoing basis to answer questions and address requests for information is an hour or less a week.
I hope this article answers your questions. If, however, you have a question I haven’t addressed here, please do not hesitate to email your question to me, and I will be happy to answer it!