The Individual Development Account (IDA) matched savings grant program is on the top of my list for entrepreneurs seeking a grant to start or grow their business. The grant is designed to help low-to-moderate income entrepreneurs fund their business through a cash match program. As part of the program, entrepreneurs agree to save money towards business purchases, complete financial education training and develop a business plan.
Related: How can I get small-business grants?
How does the IDA Program work? When you are accepted into an IDA program, then your money will be matched with donations from the IDA provider. That means that you can receive one or more dollars for every dollar you save in an IDA.
Each participating IDA provider has different requirements in place. For example, MIPO, an IDA provider based in Portland, Oregon offers participants a three-to-one match on their IDA savings for up to $12,000 in funds over a three-year program period. Participants can contribute up to $1,000 in a business savings account with an approved financial institution and MIPO, matches the funds up to $ 3,000 annually. Each year the participant can draw down up to $ 4,000 from their IDA account towards purchases and services for their business.
How can I use the grant money to support my business? Past participants of the IDA program have used the grant for a variety of purchases including buying supplies or equipment, designing a website, attending a tradeshow, joining a business association, hiring consultants or even purchasing a company vehicle.
How long can I enroll in the IDA program? An IDA program can be as short as six months of enrollment or as long as several years. Participants can enroll in the program more than once if they are saving for a completely different goal. Some business owners use the funds towards additional IDA goals, including the purchase of a first home or obtaining a college degree.
Are all IDA programs the same? Every IDA program is different. Programs vary based on the amount of matching dollars available, the length of the program and the type of savings offered. For example, some IDA providers only support saving towards a business while others focus on saving towards a home or an education. The best way to find out is to contact the IDA provider in your local area.
What are the qualifications for the program? In general, the IDA program eligibility is based an applicant’s household income level for IDA applicants, the net worth of the applicant and ability to save for the business. Your local area IDA provider will be able to provide you with their specific requirements to determine if you qualify for the program.
Where do the match dollars come from? Match dollars for IDAs come from a variety of funding sources, including state funds, private foundations, corporations and federal funds. Your money is matched to encourage you to save in the future by creating a matched savings incentive and offering participants financial saving classes throughout the program.
What if I have gone bankrupt? Many participants have participated successfully in the program despite poor credit, no credit or even having filed for bankruptcy .
Where can I find out more about the IDA program in my area? The IDA Program Directory offers access to more than 500 IDA providers across the country. Find your local IDA provider and contact them to learn more about their IDA program and start savings towards your business dream.