Early stage companies might have critical new funding prospects thanks to a program run by the U.S. Small Business Administration (SBA).
To create jobs and to help new entrepreneurs get capital, the SBA launched the initiative – via a new Small Business Investment Company (SBIC) capital investment program in May 2012.
That’s why the SBA has recruited experienced investment fund managers. If licensed for the program, investment funds can multiply their collective assets for lending up to an aggregate $1 billion to new entrepreneurs.
“Early stage small businesses face difficult challenges accessing capital. At the same time, in this financial climate, venture capital funds are finding it difficult to raise money from institutional investors,” said SBA Administrator Karen Mills.
“By licensing and providing SBA financial backing to Early Stage Innovation Funds, we hope to expand entrepreneurs’ access to capital and encourage innovation as part of President Obama’s Start-Up America Initiative launched last year,” she explained.
Such funds can get matching SBA-backed funds up to $50 million.
The proviso for funds – they must target at least half their funds for young businesses.
The SBA will earmark the funds for a 60-month period.
In announcing the early-stage program, an SBA press release cited the difficulties for young companies that need between $1 million and $4 million.
“Since January 2006, less than 10 percent of all U.S. venture capital dollars went to seed funds investing at those levels, and 69 percent of those dollars went to just three states: California, Massachusetts, and New York,” explained the press release.
“The Early Stage Innovation Fund initiative will target this gap by licensing and guaranteeing leverage to funds focused on early/seed stage investments,” promised the SBA release.
Since 1959, the SBA has worked with SBICs to provide capital. In 2012, there are nearly 300 SBICs with at least $17 billion in capital.
From the Coach’s Corner, here are three resource links:
“The harder you work, the harder it is to surrender.”
Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.
Jan. 26, 2012
There’s more evidence that small business plays a pivotal role in creating jobs in Washington and other states, according to the Office of Advocacy in the Small Business Administration (SBA). The Office of Advocacy released small business data for each of the 50 states.
SBA believes the new data is “an invaluable resource for small businesses, legislators, academics, government officials, and policymakers in each state.”
“Small businesses are the foundation of economic growth in Washington and in our nation” said Dr. Winslow Sargeant, Chief Counsel for Advocacy. “By supporting policies that promote innovation and entrepreneurship, we help small businesses tackle these challenging economic times. These statistics are a resource for a path to economic growth.”
As for Washington state, the report explains “small business employment; business starts and closings; bank lending; business ownership by minorities, women, and veterans; and firm and employment change by major industry and firm size.”
Salient data about small business:
- There were 532,162 small businesses in Washington in 2009. Of these, 142,854 were employers and they accounted for 53.3 percent of private sector jobs in the state. Small firms made up 98.1 percent of the state’s employers.
- Throughout 2010, the number of opening establishments was lower than closing establishments and the net employment change from this turnover was negative.
- Washington’s real gross state product increased 0.7 percent and private-sector employment decreased 1.8 percent in 2010. By comparison, real GDP in the United States decreased 1.3 percent and private sector employment declined by 0.8 percent.
- Self-employment in Washington surged over the last decade. Female self-employment fared the best compared with other demographic groups during the decade.
To promote entrepreneurship, this week the Washington Policy Center sent state lawmakers in the 2012 legislative session these recommendations:
- Revisit the voluntary settlement agreement as passed by the state Senate in 2011 – $1.2 billion
- Reform the displaced worker retraining program
- Simplify sales taxes by using an ‘origin based’ tax (as opposed to a ‘destination based’ tax) and creating a flat rate for out-of-state businesses
- Review regulations to ensure that Washington rules don’t exceed federal regulations
- Enact Tort Reform
- Do no harm in transportation policy – do not reduce road lane capacity
- Do not follow Seattle in enacting statewide paid sick leave
In addition, Gov. Gregoire suggested her strategies to aid small business — business and occupation tax relief.
How has the Legislature responded? Lawmakers have ignored their $1.5 budget-deficit crisis.
Instead, lawmakers are considering other matters – mandating paid sick leave and safe leave, banning plastic bags, abolishing the death penalty and gay marriage.
When will Washington’s Legislature demonstrate wisdom?
From the Coach’s Corner, also read:
Knowledge is knowing a tomato is a fruit. Wisdom is not putting it in a fruit salad.
Columnist Terry Corbell is also a business-performance consultant and profit professional. Click here to see his management services (many are available online). For a complimentary chat about your business situation or to schedule Terry Corbell as a speaker, why don’t you contact him today?
Aug. 4, 2010
If you need up-to-date information on healthcare for your small business, the Small Business Administration is holding a Web Chat. The SBA’s Web Chat will highlight small business health care, with a focus on how the Affordable Care Act will benefit small business owners through available tax-saving incentives.
Participants can learn about the newest tax credits they can take advantage of, and additional tax provisions to be implemented during the next several years.
John Tuzynski, chief of Employment Tax and Specialty Programs for the Small Business Self-Employed (SB/SE) Division at the Internal Revenue Service, will host the August web chat on “Healthcare and Small Business.”
SBA’s Web chat series provides small business owners with an opportunity to discuss relevant business issues online with experts, industry leaders and successful entrepreneurs. Chat participants will have direct, real-time access to the Web chats via questions they submit online in advance and during the live session, with instant answers.
WHEN: August 12, 2010, 2010, 1 p.m. ET. Mr. Tuzynski will answer questions for one hour.
HOW: Participants can join the live Web chat by going online to www.sba.gov, and clicking “Online Business Chat.” Web chat participants may post questions before the August 12th chat by visiting http://web.sba.gov/livemeeting/Aug10/ and posting their questions online.
To review archives of past Web chats, visit online at http://www.sba.gov/tools/monthlywebchat/index.html.
From the Coach’s Corner, however, please note these columns:
If you’re a small business owner, most likely you’re feeling the pain of overzealous regulation by government.
Small business owners feel the pain – losses in time and money – more readily that management in large companies. They’re closer to the cash register and have fewer resources – especially, micro businesses.
That means, in general, they’re more fiscally conservative and more likely to implement change to improve their cash flow.
In my experience, depending on the locale, the majority of small businesspeople complain of bureaucrats that make profits hard to achieve.
Even a federal agency agrees, according to published reports. The Office of Advocacy at the Small Business Administration (SBA) states that federal rules cost business $1.1 trillion. And it costs small businesses 45 percent more than big businesses to comply.
That costs jobs.
So the SBA’s office says it’s been doing something about it with its regulatory review and reform initiative; what it calls “r3” to target regulations that are “ineffective, duplicative, or out of date.”
In 2008, it received 82 nominations for onerous rules that need reform. After two years of study, it whittled down the list. In 2010, it decided to focus on 10 federal rules that need revision.
“Only 10?” you’re thinking. Well, just as it took the SBA two years to decide on 10 finalist rules, getting government to reform anything takes years. So let’s congratulate the agency for its efforts.
In difficult situations, a positive attitude works wonders. The place to start is to chart progress. It’s a healthy exercise to focus on what’s right than on what’s wrong. Relish your progress. So regarding the 10 rules, let’s try to appreciate how far the agency has come.
Here’s a tip of the Biz Coach cap for the 10 federal rules:
- Update Air Monitoring Rules for Dry Cleaners to Reflect Current Technology
- Flexibility for Community Drinking Water Systems
- Simplify the Rules for Recycling Solid Waste
- EPA Should Clearly Define “Oil” in its Oil Spill Rules
- Update Flight Rules for the Washington, DC, Metropolitan Area
- Eliminate Duplicative Financial Requirements for Architect-Engineering Services Firms in Government Contracting
- Simplify the Home Office Business Deduction
- Update MSHA Rules on the Use of Explosives in Mines to Reflect Modern Industry Standards
- Update OSHA’s Medical / Laboratory Worker Rule
- Update Reverse Auction Techniques for Online Procurement of Commercial Items
Do you have questions, concerns or comments? Here’s an e-mail address: firstname.lastname@example.org.
I say keep it going. If state and local governments would only see the light.
From the Coach’s Corner, does your small business need economic data or research? Try this article: Strategic Planning: List of Informative Web Sites
“Government is not a solution to our problem, government is the problem.”