Question 1

Is Stepsmith a fit for returning citizens and opportunity youth?

Accepted Answer

Yes. Returning citizens, opportunity youth, and longtime residents of the neighborhoods Stepsmith serves are the program's core founder pool. The conviction-status disclosure on the intake form exists so the underwriting lead can read context — not as an automatic disqualifier. A non-material record is reviewed, not filtered out.

Question 2

What is the conviction-status disclosure, and who actually reads it?

Accepted Answer

It is a required free-text field on the /apply intake form (20–8,000 characters). The disclosure is read only by the Stepsmith underwriting lead during application review. It is not shared with anchor buyers, the CDFI allocatee, or any third party, and it is never used as a marketing surface.

Question 3

What actually disqualifies an applicant?

Accepted Answer

Four hard floors, all founder-facing: an active license suspension or revocation in the relevant trade; an unresolved federal tax lien; an open bankruptcy within the last 36 months; or a felony conviction directly material to the trade (e.g., contracting fraud) within the last 60 months. Anything outside that four-item floor is reviewed, not auto-disqualified.

Question 4

Do I need a clean credit score?

Accepted Answer

No. The underwriting file weighs trade license, market context, the diagnostics report, and the conviction-status disclosure first — personal credit is one input among several, not a gate. Stepsmith was designed for founders whose credit history does not match their journeyman skill.

Question 5

What does the financing actually look like across the three tiers?

Accepted Answer

Three revenue-based tiers, sized to the bid. Tier 01 Starter: $5K–$10K principal, 6% monthly-gross royalty, 24-month term, 1.30× cap, $150/mo floor. Tier 02 Growth: $25K–$75K, 6% royalty, 36 months, 1.35× cap, $500/mo floor, NMTC leverage available through the CDFI allocatee. Tier 03 Scale: $100K–$250K, 5%–7% tiered royalty, 48 months, 1.40× cap, $1,500/mo floor, NMTC stack plus 1:1 matched philanthropic capital.

Question 6

How does matched philanthropic capital and NMTC leverage work?

Accepted Answer

A $100K founder ask can land as a roughly $300K build. The principal note funds the base, the CDFI allocatee layers New Markets Tax Credit (NMTC) leverage on top (a 39% QLICI subsidy), and matched philanthropic capital is committed at intake and disbursed at the first-PO milestone. Both the NMTC stack and the 1:1 philanthropic match are geography- and trade-qualified — not every applicant qualifies.

Question 7

What is the royalty — is it interest?

Accepted Answer

No. The royalty is a fixed percentage of monthly gross revenue remitted to Stepsmith until the cap is reached or the term ends. It is not interest, it is not equity, and there is no compounding. Royalty applies to trades revenue only — non-trades revenue and pass-through subcontracted work are itemized on the monthly remittance form and excluded with documentation.

Question 8

What security do you take, and is there a personal guaranty?

Accepted Answer

A blanket UCC-1 on business assets and an equipment lien on financed gear at every tier. Personal guaranty applies to tiers 01–03. Tier 03 adds affirmative and negative-pledge covenants plus change-of-control reporting. Pledged collateral is released pro-rata as the cap is repaid — there is no balloon and no prepayment penalty.

Question 9

What happens if a month is slow?

Accepted Answer

The monthly payment floor ($150, $500, or $1,500 by tier) is the minimum remittance regardless of gross — set so the note services itself even in a lean cycle. For documented events (medical, weather, anchor-buyer slip), the note also allows up to 90 days of forbearance per 12-month period. Forbearance accrues the clock; it does not forgive principal.

Question 10

Is the apprenticeship actually paid from week one?

Accepted Answer

Yes — every founder-apprentice draws a W-2 wage from their own operating entity starting week 1, not a stipend. The principal note funds the first 60 days of crew payroll, so the apprentice is on the books of the entity they are building from day one. The 12 weeks end with a real payroll on the books, not a fellowship certificate.

Question 11

What is the weekly time commitment during the 12 weeks?

Accepted Answer

Roughly 30 hours per week, split between field work with the journeyman mentor, classroom time on estimating and instrumentation, and the on-paper artifacts the pipeline depends on (license packet, business plan, principal note, payroll, pledge, bid, PO). The 12 weeks is the cohort's working rhythm, not an evening program.

Question 12

When is equity actually granted?

Accepted Answer

At week 12, contingent on the first signed PO from an anchor buyer. The Stepsmith program lead drafts the equity grant document; the founder signs it; both parties file it. The equity in question is the founder’s own stake in their own operating entity, formalized and filed at graduation. Stepsmith does not hold founder equity — the note is revenue-based, not equity-based.

Question 13

How big is each cohort, and do I have to relocate?

Accepted Answer

Cohorts are intentionally small — typically 6 to 12 founder-apprentices per market per quarter — so every apprentice gets the journeyman mentor hours and the anchor-buyer walk-throughs the pipeline depends on. Founders live and work in the same city where their operating entity is formed; Stepsmith does not move founders between markets.

Question 14

What happens if I miss a milestone?

Accepted Answer

Missing a milestone triggers a 30-day cure window — the same default-handling language as the revenue-based note. The Stepsmith program lead works the founder through the gap. Two missed milestones across the 12 weeks is the practical floor; three is the hard floor for staying in the cohort.

Question 15

Which trades does Stepsmith actually finance?

Accepted Answer

Five named trades, taken straight from the FOUNDER_TRADES contract: HVAC, Electrical, Plumbing, Carpentry, and Roofing. The intake form picks one of those five — there is no sixth trade on the application. A founder must hold an active journeyman license in one of them (or a license that will issue inside the 12-week window) to be eligible.

Question 16

What counts as an "adjacent service"?

Accepted Answer

Services that pair with one of the five named trades and whose NAICS code cross-walks into HVAC, Electrical, Plumbing, Carpentry, or Roofing. Examples include insulation and weatherization (cross-walks into HVAC/carpentry), sheet-metal fabrication (HVAC), low-voltage and structured cabling (Electrical), drywall finishing and finish carpentry (Carpentry), and roof decking or underlayment (Roofing). The intake form has no adjacent-service slot; adjacent scope is scoped per applicant during the diagnostics phase.

Question 17

My license is in process — does that count?

Accepted Answer

Yes, provided the license will issue inside the 12-week window. The intake form accepts an in-process license; the W 1 milestone (verified active license or in-process on file) is the documented gate. A license that is not yet in process at intake is the one condition that holds up the principal note at W 5.

Question 18

What about service-only trades — cleaning, handyman, punch-list?

Accepted Answer

Not in scope. Stepsmith finances five named licensed trades plus adjacent services that pair with them — not general handyman, cleaning, janitorial, or punch-list work. The intake enum reflects that boundary on purpose; it keeps the buyer-pipeline match (municipal, healthcare, higher-ed, developer scopes) honest.

The questions founders askbefore they apply.

Returning-citizen path, conviction disclosure, and what disqualifies a founder.

Three revenue-based tiers, the per-tier numbers, and how the match stacks.

Pay, weekly time commitment, and what the founder walks out with at week 12.

Which trades qualify — and what counts as an "adjacent service."

Read the page behind the answer.

Apply and the underwriting leadwrites back within 48 hours.