Low-Cost Loans to Finance an Employee Buyout, or Grow an Employee-Owned Firm

Last year we featured some information on funding available for worker's cooperatives.  We have found another resource for workers attempting an employee buyout in Ohio or areas near the state of Ohio.  It's the Common Wealth Revolving Fund, which makes available loans of up to $250,000 either for employee buyouts or to finance growth in employee-owned companies.  The fund is centered in the Kent State University Employee Ownership Center, which also offers consultation, training and development for current companies as well as those contemplating a buyout. 

The EOC not only offers consultation to those companies, but business owners that are thinking of exiting, or thinking of selling out to their employees.  They also host seminars and educational programs for business owners who are looking to leave or sell their businesses, to employees or otherwise.  If you are involved in any of these situations, their website would be a valuable resource.

Business Plan Contest in Detroit, and Elsewhere

While there aren't many outright grants to start up your business, there are sometimes business plan competitions that you can enter.  And since a business plan--a detailed plan of your business's financial needs and prospects--is necessary if you wish to get lenders to loan you money, why not look into the possibility?

The nonprofit group Hatch Detroit is running its fourth annual contest, in which would-be brick and mortar retail business can win $50,000 and other support to help if they submit the winning business proposal. They are accepting proposals from now until July 16, 2014. 

But what if starting a brick and mortar retail business in Detroit is not your cup of tea?  Then check out Biz Plan Competitions, a site that tries to identify various business plan competitions and other such contests across the U.S.  And if you want to see a free sample business plan, check your local library to see if they have a print or electronic copy of Gale's Business Plan Handbook, a multivolume list of real business plans.  If you want to talk to a real person to develop your business plan, find a local chapter of SCORE, the Service Corps of Retired Executives.  They are volunteers who mentor new and aspiring business people. And good luck!

Finding Financial Support for Selling Healthy Food in American Food Deserts

Financial support (that means for private, for-profit businesspeople) of healthy food in what are referred to as "food deserts" is getting easier.  Food deserts are places in inner city and rural America where it's hard to find fresh, healthy food.  The Healthy Food Access Portal doesn't have a complete list of sources, but rather has identified a number of strategies that private businesses can use to find tax breaks, loan sources and partnerships that can make it possible to expand healthy food markets into the inner city or remote rural areas.  It does have a heading called Find Money, but direct grants are largely for nonprofits rather than for-profits.

A good source of strategic information is under "retail strategy," in which several types of retail outlets are discussed, which ones work in different settings, and how to develop each one.  They have several examples of successful retail outlets, and how they created them.

The best bet for private, for-profit businesses is to form partnerships with nonprofits who have an interest in developing sustainable business in underserved areas.  The Find Money part of the website identifies a few of these but not all possible partners.  A more complete strategy is found in the website Green for Greens: Finding Public Financing for Healthy Food Retail.  It does have a good list of federal grant programs, but if you look at the eligibility, most are for nonprofits.  The useful part of the publication is the strategy: identify players in your community that can help you, and make your case to them to partner with you in creating more healthy food retail outlets.  These people include business development offices in your state and local government, but also community development finance agencies, public and private, in your area, for loan money. You need to make your case to them, and tell them how your business can fit in with their plans for the community.  Once you form useful partnerships, these eligible partners can apply for grants and help you get loan money and tax incentives to make retail food sales in food deserts possible. 

 

Financial Help for Builders of of Low-Income Housing

Patrons come by the reference desk on a regular basis, looking for free money and money for businesses.  Some in particular are looking for funds to build low-income housing.  I am not an expert in low-income housing financing, just in how to find the sources of information.  But in a couple of ways, this is like looking for other business money in that 1) government only pays you to do things it would like you to do, not what you would like to do and 2) those that got, get.  By that I mean that the money is not to start a home building business.  The firms that they are looking for are those with some of their own financial resources already, who just need incentives or some help with funding. 

From what I can find in Ohio, it's mostly financing loans and tax credits, which developers can sell for the money to develop low-income housing.  The details of programs for Ohio low-income housing developers is here.  The HDAP (housing development assistance program) includes low-interest, deferred payment loans, or SOMETIMES, outright grants.  If you are interested in finding tax credits and loans to build low-income housing, see your state's housing development agency. In some states the housing credit is not administered by the housing development agency.  This is the list of all state housing credit agencies. 

Competition for Women Entrepreneurs in Michigan

On the reality show Shark Tank, budding and expanding entrepreneurs get to pitch their ideas to a panel of investors who decide to invest in the business or pass.  In Michigan, Walsh College and several business and community partners have joined to create a program in which Michigan female entrepreneurs can compete for money to start up or expand their business.  It's the Entrepreneur You contest, which is fast approaching its 2013 deadlines. 

To compete, you must be a woman or part of a majority woman-owned business in Michigan that  falls into one of three categories; a company of less than $500,000 revenues, a "lifestyle business," (one that supports a substance for a particular income level and no more, with revenues of $100,000 or less per year.  The last category is for social entrepreneur businesses that are created for a particular social good.  All the categories and rules are in the guidelines. 

The deadlines are coming up fast--August 7th for companies, and August 13th for the lifestyle and social entrepreneur competitors.  All finalists will get coaching and mentoring, and the winners will get money and more mentoring to further their business creation or expansion. 

Business Financing, Microfinancing, and Other Incentives for Business in Detroit

Yes, my hometown of Detroit did go bankrupt.  When you are taking the freeway offramp in a major city and a pheasant scurries across your path, as happened to me a couple of years ago, that's damn near a foregone conclusion.  People now hunt (with dogs) in the vacant lots near my childhood home.  But where everything is a shambles, nobody has much to lose.  So some organizations and people have decided to throw what they can in the pot--either to live in Detroit and start businesses, or to create money or other incentives for business creation. 

Where to find them?  Midtown Detroit Inc., devoted to midtown development, has a whole page of incentives for business, housing development, microfinancing, loans, historic preservation, and more.
It goes beyond the midtown area to the whole city, and even other areas in Wayne County.  The list is staggering.  Know any Jewish entrepreneur who wants to remain in southeast Michigan?  There's a loan and mentoring program for them. The Urban Retail Loan Fund encourages the development of retail businesses in downtown and Detroit neighborhoods, a type of business that is usually overlooked in incentive programs.  Brownfield funds, tax incentives, it's all there.

Another place to look is Bizdom, the organization that provides $25,000 in startup money for entrepreneurs in Cleveland and Detroit, along with mentoring and training.  What's the catch?  In exchange for the money, they get 8% of your business's equity, and use the profits to finance other businesses in those cities.  What kind of people do they finance?  Those over 18 years old who are in tech and web-based businesses.  Learn more here.

Grant for Young Entrepreneurs Working to Help the Poor

Once again, the exception proves the rule.  While there are hardly any legitimate grants for for-profit businesses, the Hitachi Foundation has a competitive grant program that specifically targets businesses started by young people that benefit the poor.

The Yoshiyama Young Entrepreneurs Program awards grants to businesses started by young people (between 18 and 29) that benefit "low wealth" Americans.  The business must have been up and running (and making money) for at least 12 months, but not more than 5 years, so this is NOT about funding a start-up.  Those awarded the grants will get $40,000, plus mentoring and technical assistance to take their work up to another level.  And while either for or non-profits are eligible, non-profits must be supported by a business model, rather than through grants and contributions.  See more about their selection process. This is for a small number of recipients--and part of the criteria is improving the lives of the poor.  And that improvement has to come through some other way than supporting charities through profits.  Do you employ, train, or educate the poor?  Look at these examples of past awardees to see if your business may qualify.

More on Microloans in Toledo and Northwest Ohio

As I touched on a few weeks ago, ECDI (the Economic and Community Development Institute) has pitched its tent in downtown Toledo (the Maritime Plaza), and is bringing some of its useful financial products to small businesses in the northwest part of the state, just as it has in Cleveland and Columbus.  While they don't have the full array of services that are offered in those other cities, they can provide loans of up to $35,000 to small businesses that may have been turned down by banks, at reasonable rates.  They are SBA approved to provide loans in all Ohio counties.  Call them at 419-708-4636.  If you live outside of Ohio, try some of these other possible sources of microfunding.

Source of Funding for Worker's Cooperatives

We have several posts on financing and other help for business, but we've found another one--for worker-owned cooperative businesses.  We note the story of the New Era Windows Cooperative of Chicago, formerly Republic Windows and Doors.  In 2008, the plant was scheduled to be closed by its owners, and was occupied by its workers.  The factory was then purchased by another firm, and again scheduled for shuttering.  This time, the workers decided to buy the business themselves.  And who would finance it? 

That would be the organization The Working World.    It's an NGO that loans money for worker's cooperatives in Nicaragua, Argentina, and now, the United States.  Besides New Era Window, they have also provided a loan for a cooperative cleaning business in Brooklyn to expand.  Contact them on their website or call them at 646 257 4144. 

More Microlending for Small Business--Samuel Adams Brewing the American Dream

Just ahead of the big announcement by the Economic and Community Development Institute (ECDI) that they are opening an office in Toledo and bringing their business microloan programs to northwest Ohio (most of their operations have been in Columbus), here's a bit of info about a microlending aimed at food and beverage businesses.  Samuel Adams, the craft brewery that grew to a force in the beer business, is partnering with several nonprofits engaged in microloans across the country to provide loans ranging from $500-$25,000 to start or grow a business. 

Besides the loan program, they also host some "speed counseling" and other educational events.  They also include a list of regional business resources that include lending, food incubators and shared kitchens, educational programs and business associations.

It's not an exhaustive list, but here's more on microlending, business incubators, and food business incubators.   Try them all out.

If You Live in Certain States, Your Unemployment Checks Can Work Towards Starting a Business

All states have some form of unemployment insurance, but in five states--New York, New Jersey, Washington, Pennsylvania, and Oregon (and apparently from their inclusion in this document, Delaware)--the unemployed have another option.  In the other 45 states, the unemployed have to show that they are working towards another job by training and/or pounding the pavement.  But in these five states, there is a self-employment assistance program.  Unemployed workers in these states can earn their check by proving that they are working to become self-employed--that they are training to set up a workable business, writing a business plan, or other concrete steps to start a business, and the usual job hunting requirements are waived.

What are the requirements for this?  Each state has different regulations that you can find here.  While this page is set up for policy makers in other states, it lets you know what is expected. 
The U.S. Department of Labor is trying to expand this program to other states, and has given money to states across the country to set up their own programs.  If you (sadly) become eligible for unemployment insurance in your state, ask if your state has a self-employment assistance program, and what you need to go to become eligible.

Get Extra Collateral to Fund Your Ohio Business. Get Access to More Funds in 10 More States

One of the biggest roadblocks in business funding for newcomers is finding the collateral that will make you a good loan prospect.  Many just don't have enough.  The Ohio Development Services Agency has a fairly new program to help.  It's the Collateral Enhancement Program.  It can provide up to 30% of the loan collateral for a small business (up to 50% for certified minority or women-owned businesses, or businesses in the HUB Enterprise zones. While business owners cannot apply for the collateral, lenders can.  However, if you think collateral might be an issue, you can contact a local Development Services Agency office and ask them to direct you to a lender that participates in the program. 

This program is the result of a grant from the U.S. Treasury Department to enhance the access of capital to small businesses in 11 states.  If you a small business owner in the other ten states-- Tennessee, Iowa, Idaho, Texas, Mississippi, Louisiana, Florida, Virginia, Oregon, and Alabama-- use the links to your state's business development office to find out what programs might be offered in your state.

The Flip Side of On the Job Training Opportunities: Government Aid to Businesses that Need to Train Workers

Our last posting was aimed at workers who are looking for on the job training opportunities.  The obvious flip side is that employers can get the government to subsidize the training of their new workers to new skills.  In Ohio, employers who want to take advantage of this program can contact the Jobs and Family Services Department, 

Also, if you are an employer in another state, you may want to search google with "on the job training" and your state's name.  You could also contact the one-stop employment shop in your area as well. 

Another place to contact--if you are interested in hiring older (50+), low-income workers--would be Experience Works, a non-profit that works to train low-income older unemployed people to get jobs.  They operate in 30 states and Puerto Rico.  You can get in touch with a local office and find if they can match you up with trained older workers.  Likewise, if you are a low-income unemployed person (within 150% of the poverty level), they may be able to train you for full time employment.  It won't be for an executive or midlevel position, but you may be able to get a leg up to some sort of employment.

A New Source of Funding for Energy Development and Rural Energy Efficiency

A late comment on the USDA's involvement in rural housing development programs prompted me to look again at stuff the Rural Development Agency does--and it drew my eye to their energy development and conservation funding programs.  I've done other blog entries about energy programs from DOE and state development and energy programs, but realized the I overlooked the obvious driver in government funding--who has an interest in getting something accomplished?  The USDA has an obvious interest in: 1) helping rural businesses and farms with money saving 2) helping develop and nurture biomass energy sources (which farmers can grow and sell).  I should have thought of it sooner.

The main place to look is the main energy page at the USDA Rural Development Office.  It has links to the Biorefinery Assistance Program, which provides government guarantees on loans to finance the building and expansion of renewable bioenergy plants.  This won't necessarily make the loan cheaper, but make the bank more inclined to create the loan, because they know they won't get burned. 

The Repowering Assistance Program was created to finance projects that replacement of fossil fuels with biomass fuels that are NOT made with cornstarch (which is already been done).  The Advanced Biofuel Payment Program gives payments to producers that create fuels from"... renewable biomass crops such as cellulose, sugar and starch (other than ethanol derived from corn kernel starch), hemicelluloses, lignin, waste materials, biogas, butanol, diesel-equivalent fuel, sugarcane, and nonfood crops such as poplar trees or switchgrass." 

Finally, there's the Rural Energy for America Program.  It provides grants and loans to rural small businesses and farms to install renewable energy systems, energy saving systems, energy audits and feasibility studies. 

Tax Credits from the Health Reform Law

The new Health Care Act is now actually two years old, but many have been holding their breath until the Supreme Court's thumbs up in June.  Some folks are still holding their breath, perhaps until they turn blue, but everybody else is getting on with it. 

Employers with less than 50 employees, health coverage is optional, but a tax credit is currently available to employers with less than 25 full time employees with average salaries of less than $50,000 (less for nonprofit employers).  The credit is for up to 35% of the costs to the employer.  By 2014, that will grow to 50%.  For more information and another perspective, see the page on ehealthinsurance (the tax credit for employers starts on page 10). For the technical details from the IRS themselves, see the IRS page on the credit, including the form you need to claim it.

So if you are an individual, do you get a credit to help you with insurance?  Not just yet.  However, in 2014, there will be a tax credit available to low and moderate income individuals to help with health insurance costs.  In the meantime, if you need help picking through your available options, you can try this interactive page to figure out your most affordable move.

Getting Help From Business Incubators

A few weeks ago, we had an entry on culinary incubators--organizations that give food entrepreneurs the space, equipment and support they need to create food products for market.  But there are general incubators, too, that help various types of businesses take off with space, equipment, access to funding, and other types of support.  Some provide free or inexpensive office space, or lab equipment for high-tech businesses.  Many offer access to loans or other types of funding.  They may offer mentoring or help writing a business proposal. 

Business incubators are different than small business development centers in a couple of ways.  SBDC do not provide space, equipment, or networked service, which many incubators do.  Also, small business centers are required to help any small or new business that requests their help, whereas business incubators often require you to apply for admission into their program.  Many business incubators only provide start-up space and help for certain kinds of businesses in which they specialize.  For instance, the Toledo, Ohio incubator at the University of Toledo specializes in renewable fuels, information technology, and other high tech businesses.  Many specialize in nuturing the type of business that takes a fair amount of research and development before they can bring a product to the market.  Techtown in Detroit, from their material, seems more broadly based and offers services and/or space to all sorts of start-ups. 

You can find an incubator near you at the National Business Incubators Association website.  Howevever, sometimes the links are not terribly helpful.  They may lead to an incubator's main site--like a university--with no link to the actual incubator activity.  In those cases, you might want to google the incubator's name and see what you can find. 

Contest for New Food Entrepreneurs in Northwest Ohio. And Help for Food Businesses Elsewhere

A short while back, somebody came across this blog by putting the following query in Google: "a kitchen in Toledo where I can make my soup."  I knew EXACTLY what they needed; unfortunately, they came and went, and this blog did not have the answer at the time.  But I do now.

They were looking for something that is called variously a "cooperative kitchen," a "food incubator," or a "culinary incubator."  What all these names mean in general is a professional-grade kitchen and small scale food manufacturing place that can be rented to get food entrepreneurs started in production without the expense of creating their own kitchen.  In the Toledo/northwest Ohio area, that would be NOCK (the Northwest Ohio Cooperative Kitchen) in Bowling Green. It has a baking and canning license and is approved by the Ohio Department of Agriculture.  It also has a food processing section available.  But to participate, you have to be business-ready: at least $500,000 in product and general liability insurance, and a refundable $200 deposit.  Rent is $20 an hour (minimum 4 hours use), and you must get an orientation and training on using the facility. 

It's affilitated with the Center for Innovative Food Technology, which provides many types of help for small and growing food businesses, like information on marketing, labeling, food safety, etc.  And now they have a contest that can help the winning businesses: The Fifth Annual Food Product Development Contest.  If live in northwest Ohio and have a recipe with great commercial potential, you can submit it by May 25th.  The three winners with the best products will be given one full year's assistance towards making their product commercially viable: they will be allowed to produce it in the kitchen, and get advice from experts in the field.  They will get help with nutritional analysis, tradmark and copyright issues, label design and more.  For more information, visit the website or call Paula Ray at 419 535 6000, extention 117.  There are also contests for central and northeast Ohio.

But Toledo is not the only place in the U.S. with kitchens like this.  This is one directory of cooperative kitchens, though there are many more.  To find more, try googling "cooperative kitchen," or "food incubator," or "culinary incubator" along with the name of your state.  If you are a fledgling food business, or a cook with a great idea, they can be a great help in getting your business off the ground. 

Real Minority Business Help--Where to Find Help in Minority Business Certification

A lot has been made of "grants to minority business."  Often, these are wildly exaggerated. There are NOT grants to start up most businesses--even when grants are targeted for business, it is for businesses that are already up and running, and are given to encourage a business to expand.  However, there are programs targeted to minority businesses with an eye towards increasing their business prospects.

One of these is minority certification.  If a business is certified as minority owned, it may help them get business from contractors, or state and local governments, who are trying to do more business with minority or disadvantaged businesses.  For instance, the state of Ohio has a searchable list of minority-owned businesses, and EDGE-certified (businesses owned by disadvantaged people) that governments and contractors can use to identify such businesses.  The state of Ohio has a webpage showing you how to get that certification for your business as well as contacts throughout the state that can work with you to get it.  Call 1-800-848-1300 for the nearest office.

There are other centers that help minority businesses with certification and government contract readiness throughout the U.S.  For a list of state minority business certification offices, see this site.  There is also a federal site in the Small Business Administration that can tell you about the federal minority, women, and veterans business programs.

A Real Grant for For-Profit Women-Owned Busineses

I'm the first to debunk urban legends about all the grants for women-owned businesses, unless they're not urban legends.  The Foundation Center's RFP Bulletin rarely has anything for for-profits, but this past week, they did: Eileen Fisher, the clothing firm, announced available grants to women-owned for-profits that, in their words, "combine the principles of social consciousness, sustainability, and innovation to create new businesses or invigorate existing ones."  If you want to see examples of what that means, see Eileen Fisher's website for a list of past winners and their businesses.

The grants have two categories: one for start-up businesses (less than three years old), and another for more established businesses.  The former is for businesses that can document solid plans and potential for growth.  The more established businesses must have plans to take their business to a new level. They will give grants to up to five businesses in all, with grants of up to $12,500 apiece. The deadline for this year's application is May 15, 2012, and here's the application.

For more sources of funding for women's business funding, see this link.  And good luck.

Finding Aid for Refugees

There was a previous posting about the urban legend of the availability of lots of cash for immigrants to America.  While immigrants build their businesses by working hard and investing in business first and consumer stuff after they make the money, there does exist a variety of help for refugees to the United States.
local ethnic self-sufficiency groups

Who are “refugees?”  According to U.S. law, a refugee: “is a person who is outside his or her country of nationality or of last habitual residence and faces in his or her own country “persecution or a well-founded fear of persecution on account of race, religion, nationality, membership in a particular social group, or political opinion.”  This now includes people victimized by human trafficking.  The programs that help these people are funded by the federal government, but to find where to get assistance, you have to find the state and local organizations who receive grants from the HHS Office of Refugee Resettlement, who in turn provide services.  Here’s a map of state and local agencies that provide coordination for services like health care, translation, services for elderly refugees, and individual development accounts.  

In addition, there’s a page that outlines various refugee services to be financed by the federal government.  These are meant to be a source of information for nonprofits and local agencies who might want to apply for a grant.  However, if you are an individual in need of assistance, or know someone who is, go to the bottom of each page and see if they have a list of current grant recipients.  These will be local organizations that provide the federally funded service, and these are the people you want to contact.  These include lists of providers of microenterprise assistance (helping refugees find funding and technical assistance for business enterprises), and recipients of Wilson-Fish grant recipients (a federal program that emphasizes more flexible cash assistance and integration into the community), and a new microenterprise home based child care program.  Another program is RAP-P, the Refugee Agricultural Partnership Program, which helps establish refugees with successful farm businesses.  For more possible sources of assistance, see the National Immigrant Farming Initiative to find projects in your region.