An Overview of Government Assistance for Small and Medium Enterprises (SME's) by T.M.Hoy
There is a tremendous amount of aid available for small businesses from local, state, and federal government agencies. Unfortunately, finding what's available can be time-consuming and difficult, and requires more than a little patience to discover.
However, SBFO is looking out for you, and you'll find what you need right here.
For US state and local government programs, as well as links to every international economic development agency, your best resource is the Economic Development Directory, (www.ecodevdirectory.com). This fantastic site links you directly to the economic development agencies and programs in all 50 states, and economic development agencies in Europe, Asia, South and Central America, Africa, and Oceania.
This directory will assist you in finding local government money that municipal, county, and state governments are making available to the public.
You can also find local funding on a federal website – the search function (called the Loans and Grants search tool) on the Small Business Administration website (www.sba.gov). There are many, many programs available through the SBA, and even more programs from federal and other government agencies through links on that site.
Here's an overview of the SBA programs (as of July, 2013):
7(A) Loan Guarantee Program: the program for small businesses borrowing up to $750,000; up to 85% of the loan is guaranteed. It's obtained through local lenders, who apply to the SBA on your behalf.
CDC (Certified Development Company)504 Loan Program: this is longer-term fixed rate financing for equipment, machinery, or real estate expansion and modernization. The borrower must provide 10% of the loan amount, with the remainder funded by banks and CDC's funded by the SBA. The government guarantees 40% via CDC's, 50% by the bank's.
7(M) Microloan Program: the micro-loan program provides from $2,000 up to $35,000 for small businesses and is closely related to two other programs; Community Advantage, and Community Express, both programs designed to simplify the borrowing process for small business owners. This is supposed to be a "fast and simple" loan guarantee process – but as with all things governments, don't hold your breath.
Export Express: the SBA is picking up the slack where the Export Import Bank of the US has left off. This is money for exporters, wishing to borrow up to $500,000, and is supposedly processed within 36 hours or less. It is closely tied to the Export Working Capital program and International Trade Loan program -both new SBA programs, though one wonders if Congress is merely attempting to fold the old Ex-Im lending programs into the SBA. Large amounts are available, and if you're able to sell something abroad, you'd be well advised to look into borrowing through these programs.
Small Loan Advantage: another small loan program closely allied with Community Advantage and Community Express (from $25,000 - $250,000) loan programs. How difficult it is to obtain funding for these programs is unknown because they're so new, but due to the large volume of complaints about how recalcitrant the SBA has been about funneling money to the business community, Congress may have poked them hard enough in the butt to make them a bit quicker and less bureaucratic.
SBIC's (Small Business Investment Companies): these entities are licensed and regulated by the SBA, must have fewer than 500 employees, a net worth of less than $18 million, and after-tax income of less than $6 million during the most recent two years, and like Angel investors take an equity stake in the companies they invest in. An SBIC directory of licensees exists on the SBA website listed state-by-state, though only a few companies exist in each state.
SBIR's (Small Business Innovative Research): is a program with somewhat limited scope. It helps companies transform laboratory research into products, if the companies are providing a product that is of interest to a federal agency.
The SBA also offers programs such as a network of angel investors (please see the SBFO section on Angels), and other "resource partners", such as the SBD Center, and SCORE, which offer free counseling and other kinds of assistance.
The SBA also assists you with their National Lending Partners, a network of 20 major banks willing to loan to small businesses, and the SBA Veterans Pledge Initiative, which is a consortium of 120 banks devoted to lending to veterans.
Most of these programs are described in detailed articles available as downloadable PDFs on the SBA website. If you prefer to talk to a person, you can call the SBA Answer Desk at 1 – 800 – 827 – 5722 or 1- 800 – U – ASK – SBA, or e-mail them at answerdesk@sba.gov.
A general search function and tool to assist small businesses with funds and programs available through the federal government is that of Business USA, a new website designed to be a one-stop shop for small businesses looking for government assistance. Their website is www.business.usa.gov.
Another source of government funds are grants, though this is an entirely separate field in a way, as successful grant writing is a valuable (and expensive) skill. It's worth checking out however: the government site devoted to an overview of grants available is located at www.grants.gov.
A few other programs worthy of mention include the North American Development Bank's programs (www.nadbank.org), which are limited to companies located within 62 miles of the Mexican border. Another source of assistance for exporters is the US Export Import Bank, www.exim.gov., though it seems most of their lending has been transferred to the SBA.
There are also some opportunities for providing goods and services to the federal government. It is free to register as a contractor, and the website gives you everything you need to sign up and compete for government contracts. There are several sites devoted to this; the Federal Contract Registry, at www.federalcontractregistry.com, the Federal Business Access site, which is linked to the CCR and SAM (System for Awards Management) site at www.sam.com . Those interested in pursuing this should be forewarned that it is largely a boondoggle. You have to fill out half a dozen forms and register with several different sites before you can even begin the process, and thereafter unless you match some category of government preference (which includes minority business owners, those operating businesses in economically distressed areas, and the like), your chances of succeeding in gaining government contracts is negligible. In the opinion of SBFO, don't waste your time.
The great granddaddy of sources for all government programs, lending, and resources, however, is the Catalog of Federal Domestic Assistance. You can download it for free at the CFDA website; www.cfda.gov. It is 3009 pages, and the 2012 print copy costs $80 from the Government Printing Office. You can call them at: 202 – 512 – 1800, or toll-free from 866 – 512 – 1800. It's worth checking out the GPO bookstore in any case and their website is http://bookstore.gpo.gov.
There are several ways of searching the CFDA, which lists 15 types of assistance, of which there are seven financial types of assistance, and eight nonfinancial types. These are listed from A to O. A. Formula grants (allocating money to states and government subdivisions), B. Project grants (funding of projects – fellowships, scholarships, research grants, training, technical assistance, construction grants, etc.), C. Direct payments for specified use (this is financial assistance directly provided to individuals, private firms, and nonprofit institutions to encourage or subsidize particular activities); E. Direct loans (financial assistance which is the lending of monies for a set period of time, and may or may not require interest payments); F. Guaranteed/insured loans; G. Insurance; H. Sales, exchanges, and donations of property and goods, I. The use of property, and equipment; J.
There are 20 basic categories, and 176 subcategories. The CFDA covers agriculture; business and commerce, personal development, consumer protection, disaster relief, education, energy, environmental quality, food and nutrition, health, housing, income for Social Security, information and statistics, law, justice, and legal services, natural resources, science and technology, and transportation.
It doesn't include contracts with the federal government, foreign activities, personnel recruitment, benefits to federal employees, new programs established after the annual catalog was prepared, and inactive programs.
The easiest way to search the enormous document is to use the Applicant Eligibility Index. This is a listing of every agency, and every program they offer in its simplest form, with marks next to the different categories of eligibility for programs. These are limited to states, Native American Indian tribes, nonprofit organizations, other government entities, and private individuals (including businesses).
There are four other ways to search the CFDA, but none are as quick and easy-to-use.
A brief overview of the program's is given below.
The Agriculture Department offers hundreds of programs for individuals, if your business has anything to do with farming or rural areas.
The Department of Commerce also has many programs for individuals and businesses, including technical assistance available through its Economic Development branch, a Research and Evaluation program, a program for Fisheries, for Unallied Individual Projects, Unallied Management Projects, Congressionally Identified Awards and Projects, and an Unallied Science Program.
The Department of Housing and Urban Development has dozens of programs and lending for anything to do with housing.
The Department of the Interior has many programs offering funds, including Native Programs, Cultural and Recreational Resource Management, Forests and Woodlands Resource Management, Challenge Share Construction funds, a Management Initiative, Rangeland Resource Management, National Outreach Program, Recovery Act funds, money for the National Historical Landmark and National Resource Management divisions, among other programs.
There are programs and monies offered by the DOJ, the EEO, and the Department of Labor, though none are particularly alluring.
The Department of State offers Educational and Cultural Exchange grants, Global Engagement and Global Threat Reduction funds, Public Diplomacy programs, ECA individual grants, funds for Criminal Justice Systems, Counterterrorism, Transnational Crime, and AEECA PD programs.
The Department of Transportation offers Federal Ship Financial Guarantees, Capital Construction Funds, Construction Resource funds and other kinds of financing for roads and transportation hubs, and the Department of the Treasury offers money through Taxpayer Services.
Perhaps the most enticing programs in the entire catalog however, come from the Gen. Services Administration - the GSA. There are two programs in particular: 39.002 – Disposal of Surplus Real Property; and 39.007 - Sale of Federal Surplus Personal Property. This is where the real goodies are hidden! And if you check out nothing else, check out these programs.
The National Endowment of the Arts, and the National Endowment of the Humanities both offer grants to organizations and individuals as well as fellowships and stipends, and the National Science Foundation offers funds for Math, and Geosciences.
The SBA has been described already, and the Department of Veterans Affairs offers lots of programs for veterans. The EPA offer surveys and training grants, applied research efforts, environmental policy and innovation grants, and R&D for public education and so on.
Another interesting one are the programs offered by the Department of Energy, which include 81.036 – Inventions and Innovations, and 81.064 the Office of Science and Technical Information. The latter includes the Advanced Research and Projects Agency Energy Financial Assistance Program. There are lots of very unusual and no doubt profitable opportunities hidden within these categories.
Department of Education offers money for International Research and Study, Overseas Programs – Special Bilateral Projects, federal Pell grants, Javits fellowships, and federal direct student loans.
The little-known Christopher Columbus Fellowship foundation (which offers money to promote new discoveries that benefit all mankind) include the Christopher Columbus awards, the life sciences awards, and Agriscience awards.
The Department of Health and Human Services offers undergraduate scholarships for the underprivileged, Research and Development for Complementary and Alternative Medicine, Loan Repayment for Research, Drug Abuse and Addiction Research Programs, Mental Health Research Programs, Biomedical Advanced R&D Authority (BARDA), funds for Medicine and various kinds of Medical Research.
The Department of Homeland Security offers federal disaster help.
The National Credit Union Administration, and the SEC have programs and funds for lenders and investors.
Another hidden gem is the overseas Private Investment Corporation, particularly program number 70.001 – 70.999; they offer US investors assistance in financing payments and investing in developing countries. The Agency for International Development also offers funds for these purposes.
The CFDA includes the addresses and numbers of all of these agencies, as a section on developing and writing successful grant proposals, and offer sources of additional information. They offer a Federal Citizen information Center (FCIC), at 800 – 688 – 9889; open from 9am-8pm ET.
Finally, this guide would not be complete without mentioning the Directory of Federal Laboratories and Technical Resources, at www.federallabs.org, specializing in tech transfer from the government to private citizens (basically, free R&D for companies). Along similar lines the US Department of Commerce offers its
National Technical Information Service, at 703 – 487 – 4650. The print copy costs $65 + $3 shipping and handling.
Even better if you're interested in products that have not yet been created, is the Catalog of Government Inventions Available for Licensing, available from a slightly different number at the National Technical Information Service – 703 – 487 – 4805, the print copy of which is $59 + $3 shipping and handling. This catalog is filled with tens of thousands of inventions that are available for patenting by US citizens. It is an invaluable resource, though it requires some technical understanding, and an eye for a good business opportunity. Also available from the same department is the Catalog of Government Patents, similarly available to US citizens on request. Their number is 703 – 487 – 4738.
An overview of the field for those interested in tech transfer is www.techtransfercentral.com, an excellent directory of all government resources. Another source for government to business technical transfer is www.energy.gov. Both are well worth a look.
Hope you found something useful in this overview of government aid to businesses and individuals. I'll be updating this section periodically as new things become available. Enjoy !
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