Business Development and Self-Employment
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The following business development and self employment resources offer business assistance, information and possible sources for funding. The Region 6 Rehabilitation Continuing Education Program (RRCEP) wishes to thank and acknowledge the excellent work of the 24th Institute on Rehabilitation Issues (IRI) for their 1998 publication entitled "People with Disabilities Developing Self-Employment and Small Business Opportunities". Many of the following business resource sites and accompanying summary information was taken from this publication as compiled by the IRI Prime Study Group."..... each community, county, and state has a variety of other resources that may be tapped to assist with business development and retention and with community economic development efforts. These resources include local libraries, chambers of commerce, industry and trade associations, manufacturers or suppliers of products and services, and the resources listed below. This section is not exhaustive, but provides examples of what may be available for the people you assist with achieving self-employment and to your agency." (from the IRI Prime Study Group publication "People with Disabilities Developing Self-Employment and Small Business Opportunities." XXIV Institute on Rehabilitation Issues (IRI) , p.67)
U.S. Federal Government: Small Businesses Resources
Business Development Resources
Women and Minority Business Resources
U.S. Federal Government: Small Businesses Resources
Alternative Financing Technical Assistance Project
Find options for financing assistive technology through grants and loans sponsored by the Rehabilitation Engineering and Assistive Technology Society of North America (RESNA).
Americans with Disabilities Act (ADA) Guide for Small Business
Overview from the U.S. Department of Justice regarding ADA requirements for small businesses that provide goods and services to the public.
Americans with Disabilities Act (ADA) Primer for Small Business
U.S. Equal Employment Opportunity Commission (EEOC) overview of the basic employment provisions of the ADA as they relate to employees and job applicants.
Association for Enterprise Opportunity
Provides its members with a forum, information and a voice to promote enterprise opportunity for people and communities with limited access to economic resources.
Business Leadership Network (BLN)
Information on local chapters, conferences and other information from business owners on best practices in hiring, retaining and marketing to people with disabilities.
Information on how to develop a business plan to work through all the factors that will have an impact on the successful startup, operation and management of a business.
Business Tax Credits and Deductions for Employment of People with Disabilities
Fact sheet describes three tax incentives available to help employers cover accommodation costs for employees and/or customers with disabilities, making their businesses accessible for everyone.
Chamber of Commerce for Individuals with DisAbilities
The Chamber is a national cross-disability consumer volunteer organization that uses business principles to improve the economic status of people with disabilities.
Disability & Business Technical Assistance Centers (DBTACs)
Links to regional centers that work closely with local business, disability, governmental, rehabilitation and other professional networks to provide Americans with Disabilities Act (ADA) information and technical assistance relating to employment, public services, public accommodations and communications.
Disability Resources from the U.S. Department of Labor
Shortcuts to information and services the U.S. Department of Labor offers concerning disability issues.
Disabled Businesspersons Association
Nonprofit organization dedicated to assisting enterprising individuals with disabilities maximize their potential in the business world, and work with vocational rehabilitation, government and business to encourage the participation and enhance the performance of the disabled in the workforce.
Employer Assistance Referral Network (EARN)
National toll-free telephone and electronic information referral service designed to assist employers in locating and recruiting qualified workers with disabilities.
Frequently Asked Questions About Employment & People with Disabilities
Answers to questions on employment topics ranging from minimum wage and disability discrimination to training programs and accommodation.
Frequently Asked Questions Regarding Starting a Business
Common questions asked by women receiving public assistance who have started or want to start a business.
Frequently Asked Questions about Business Incubators
Answers to commonly asked questions about business incubators, which provide business support services and resources to entrepreneurial companies as they grow.
Centralized source for federal loan information.
Job Accommodation Network (JAN)
Free service that facilitates the employment and retention of workers with disabilities by providing guidance on job accommodations, self-employment and small business opportunities and related subjects.
Office of Small Business Programs
Information from the U.S. Department of Labor's Office of Small Business Programs (OSBP).
Rehabilitation Engineering and Assistive Technology Society of North America (RESNA)
Association working to improve the potential of people with disabilities to achieve their goals through the use of technology.
Self-Employment, Telecommuting and Establishing a Small Business as Employment Outcomes
Technical assistance information from the U.S. Department of Education regarding small business development and entrepreneurship for people with disabilities.
Service Corps of Retired Executives (SCORE)
Provides information, counseling and mentoring free of charge to entrepreneurs starting a small business.
Small Business and Self-Employment Service
Provides information, counseling and referrals about self-employment and small business ownership opportunities for people with disabilities.
Small Employers and Reasonable Accommodation
U.S. Equal Employment Opportunity Commission (EEOC) fact sheet provides a brief, easy-to-read discussion of the obligation to provide reasonable accommodations for applicants and employees with disabilities, with an emphasis on issues relevant to small businesses.
State Economic Development Resources
State by state listing of a variety of resources related to economic development, funding assistance and growing a small or home-based business.
Tax Forms for Small Businesses
U.S. Small Business Administration links to federal and state tax forms.
Contains information about the disabled access credit for small businesses and the tax deduction for businesses of any size that help offset some of the costs of improving accessibility for customers or employees with disabilities.
Tax Information for Small Businesses
Information for small employers and entrepreneurs from the Internal Revenue Service (IRS).
This program sponsored by the Rehabilitation Engineering & Assistive Technology Society of North America (RESNA) provides technical assistance to the 56 state and territory assistive technology programs as authorized under the Assistive Technology Act of 1998.
U.S. Business Leadership Network (BLN)
Links to local chapters, conferences and other information from business owners regarding best practices in hiring, retaining and marketing to people with disabilities.
Responsible for ensuring that small businesses are treated fairly and have an opportunity to compete and be selected for a fair amount of HUD's prime and subcontracting opportunities.
U.S. General Services Administration (GSA) Service-Disabled Veteran-Owned Small Business Home Page
Information regarding opportunities for service-disabled veteran-owned businesses to sell to the federal government.
U.S. House Small Business Committee
The Committee has oversight authority over the Small Business Administration and addresses issues related to small business such as health care and technology.
U.S. Occupational Safety and Health Administration (OSHA) Resources for Small Business
Provides access to information, guidelines and training programs OSHA provides specifically to help small businesses find and fix hazards and prevent workplace injuries and illnesses.
U.S. Small Business Administration (SBA) Americans with Disabilities (ADA) Information
Links to ADA information and resources from the SBA.
U.S. Small Business Administration (SBA) Local Offices
Find your local SBA office and resources relevant to small businesses.
U.S. Small Business Administration (SBA) Office of Veterans Business Development
Includes information on procurement preference for service-disabled veterans.
U.S. Small Business Administration (SBA) Office of Women's Business Ownership
Promotes the growth of women-owned businesses through programs that address business training and technical assistance, and provide access to credit and capital, federal contracts and international trade opportunities.
U.S. Small Business Administration (SBA) Small Business Development Centers (SBDCs)
State by state map of SBDCs, which offer one-stop assistance to individuals and small businesses by providing a wide variety of information and guidance in central and easily accessible branch locations.
Vocational Rehabilitation and Small Business Development Center Linkages
Information from the Research and Training Center on Disability in Rural Communities at the University of Montana on small business development, self-employment and vocational rehabilitation.
Vocational Rehabilitation State Offices
Links to state divisions and services that assist individuals with disabilities in securing gainful employment.
Working Partners for an Alcohol- & Drug-Free Workplace
Tools and information for businesses and communities to effectively address drug and alcohol problems among their workforces.
Information and Resource Center page
Business Development Resources
Arkansas Support Network (The Arkansas Support Network offers Self-Employment Loans "to support the development of Self-Owned Business Opportunities for Disabled People." Applicants must meet the following criteria to submit an application through the Loan Review Committee: "1.) have a developmental disability, 2.) have or are ready to operate a small business, 3.) have a need for credit, 4.) have a business plan that demonstrates a.) the ability to operate with limited overhead expense, b.) the ability to repay the loan through increased earnings, c.) listing of specific purchases or expenses to be incurred, and d.) a step-by-step approach to growing the business over time." The Arkansas Support Network states that "a program of training and technical assistance will be provided to assist the applicant throughout the term of the loan. Telephone contact is at 501 273 0338 or 1 800 748 9768.)
Disabled Businesspersons Association (The Disabled Business persons Association (DBA) is a national 501(C)(3) nonprofit, public charity and educational organization founded in 1991 to help disabled entrepreneurs and professionals maximize their potential in the business world, and to encourage the participation and enhance the performance of the disabled in the workforce.)
Rural Institute on Disabilities (Nancy Arnold - Rm. 52 Corbin Hall University of Montana Missoula, MT 59812 - 406-243-2469. The Research and Training Center on Rural Rehabilitation services works with Vocational Rehabilitation agencies and Independent Living Centers to promote the use of self-employment and economic development activities within those programs. As a result of research it has developed a model state VR policy, implementing procedures and a counselor curriculum.)
Bold Consulting Group (Private consulting group that "provides resources, consulting services, and training for organizations that want to start, modify or expand entrepreneurship programs for people with disabilities. Bold Consulting Group "works with government and non-profit organizations on the development and management of entrepreneurship programs for people with disabilities and is dedicated to providing persons with disabilities the opportunity to explore entrepreneurship as an employment option.")
Wisconsin Innovation Service Center (WISC) University of Wisconsin, Whitewater. WISC conducts market and technical feasibility assessments of new product ideas. WISC offers an affordable way for inventors and entrepreneurs to have their ideas evaluated and get enough information to make well-informed decisions on the further development of their products. To order more information about the Wisconsin Innovation service Center, contact them at 414-472-1365.
Partnership Development Group, Inc. (Partnership Development Group, Inc. is a national consulting firm that focuses on self-employment for persons with disabilities. Services include program planning and design, regional and local market analysis, entrepreneurship training, staff development, client tracking and evaluation. Mailing address is 1215 Annapolis Road, #202, Odenton, MD 21113. Contact via telephone at 301 596 1020 and/or fax at 410 519 1208.)
The Abilities Fund (The first and only nationwide community developer and financial lending institution committed exclusively to advancing entrepreneurial opportunities for people with disabilities, provides resources and assistance to individuals with disabilities pursuing entrepreneurship, training and technical assistance to nonprofit organizations to increase their capacity to serve individuals with disabilities, and support to governmental agencies to develop practices, policies and relationships that will serve the needs of their consumers who wish to make self employment their vocational goal.)
Business Development Directories
Most states or regions within a state publish statewide or regional directories. They may have different titles but look for something similar to the Montana Business Assistance & Community Development Resource Directory or the Business Resource Directory: A Practical Guide to Financing and Business Development services in Southwestern Pennsylvania. Generally they provide program descriptions so individuals can locate the services or organizations that can address their specific question or need. For example, the Montana directory contains an index of agencies, organizations and programs; then divides the programs into finance and tax incentive programs, technical assistance programs, industry and government associations, and local office listings for statewide and regional programs. Then local resources are provided. First is an alphabetical list of organizations by name followed by the resources that are available in each county. Brief descriptions of each program are provided. The Southwestern Pennsylvania Directory is organized so business owners searching for a particular service or financing tool can find what they need by referring to a business resource matrix. This is followed by program descriptions. Some of the resources listed for the Pittsburgh area in the Southwestern Pennsylvania Directory include: Pittsburgh Vision Services, Business Enterprise Venture, Ben Franklin Technology Center University of Pittsburgh-SBDC Duquesne University-SBDC, SCORE (local chapter), Allegheny County MBE/WBE Certification Program, Small Business Administration, Urban Redevelopment Authority of Pittsburgh, Minority Enterprise Corporation of Southwestern PA, Minority Business Administration, City of Pittsburgh Community Loan Fund of Southwestern PA.
Colleges and Universities
Many colleges, community colleges, and universities house programs that assist prospective or current business owners with business development activities. For example, many business schools conduct classes where the students work with a business owner to conduct market analyses, feasibility studies, or to develop business plans, or will assist a business with similar activities once it is operating. Business school interns also are a possible resource to assist with business development. Small Business Development Centers are aligned with units of higher education. Many schools house business assistance centers such as Montana Business Connections, which is located at the University of Montana or technology assistance centers such as the Wisconsin Innovation service Center.
Information and Resource Center page
Small Business Resources
Small Business Administration (403 3rd St. S.W. Washington, D.C. 20416, 1-800-U-ASK-SBA. SBA offers training, advocacy, and loan guarantees for small firms in every state and works with thousands of lending, educational, and training institutions. The U.S. Small Business Administration (SBA) is one of the main sources of small business assistance and funding in existence today. It was created by Congress in 1953 to help America's entrepreneurs form successful small enterprises. Today, SBA's program offices offer financing, training and advocacy for small firms. These programs are delivered by SBA offices in every state, the District of Columbia, the Virgin Islands and Puerto Rico. In addition, the SBA works with thousands of lending, educational and training institutions nationwide. The U.S. Small Business Administration recently refocused its efforts to provide customer-oriented, full-service programs and accurate, timely information to the entrepreneurial community. The SBA provides financial assistance in the form of loan guarantees rather than direct loans. The SBA does not provide grants to start or expand a business. SBA programs and services include business counseling and training; lending programs; and special focus programs for international trade assistance, women business owners and Native American business owners. In most cases SBA staff are not experienced with working with people with disabilities and their resources may not be accessible to people with special needs. For example materials may not be Brailled, computers may not have large print readers or talking software and there are no interpreters/communication support for persons who are deaf or hard of hearing. Because of this, it is important that counselors visit their local SBA Small Business Development Center (SBDC) to acquaint themselves with the facility, resources, and personnel and use that knowledge to determine the accessibility or lack of it and the supports needed for a consumer to access their services. One support may be that a counselor accompany a consumer on one or more visits to the SBA SBDC. (IRI Prime Study Group. "People with Disabilities Developing Self-Employment and Small Business opportunities", XXIV Institute on Rehabilitation Issues 1998, pp. 51-52)
Business Information Centers (BICs) (The SBA's technology toolbox, the business information center contains business development reference materials manuals, computers and business development software, access to telecommunications, and counselors to help small businesses get started and grow. BIC counseling and training are provided by SCORE. There are nearly 40 BICs nationally.)
One-Stop Capital Shops (OSCSs) (SBA's contribution to the Empowerment Zones/Enterprise Communities Program (EZ/EC). The EZ/EC program is a federal interagency initiative that provides a variety of resources to designated socially and economically distressed communities. OSCSs provide centralized access to a full range of SBA financial and technical assistance, as well as related sources of other federal agencies, state and local governments and the private sector. Business information centers, located within the OSCSs, offer the latest high-tech hardware, software, interactive videos, telecommunications and other tools for the small business owner to provide access to market research databases and assist with planning and developing spreadsheets. Counseling is offered in all aspects of starting, running or growing a small business. (XXIV - IRI, 1998, p. 52)
Corps of Retired Executives (SCORE) (409 3rd Street, S.W., 6th Floor Washington, D.C. 20204 1-800-634-0245. The Senior Corps of Retired Executives (SCORE) association is a resource partner with and sponsored by the U.S. Small Business Administration (SBA). SCORE is dedicated to aiding in the formation, growth, and success of small business nationwide. It matches volunteers with small businesses in need of expert advice. The volunteers, whose collective experience spans the full range of American enterprise, share their management and technical expertise with present and prospective owners and managers of small businesses. There is no charge for these services. There are almost 13,000 volunteers in 388 chapters and at 800 other locations. (XXIV - IRI, 1998, pp. 52-53)
Small Business Development Centers (SBDCs) (SBDCs are administered by the SBA to provide business development and management assistance to current and prospective small business owners. SBDCs are the result of the cooperative efforts of the SBA, private sector, educational community, and state and local governments. There are over 950 SBDCs in all 50 states located primarily at colleges and universities. (XXIV - IRI, 1998, p. 53)
Tribal Business Information Centers (TBICs) (Currently there are 20 TBICs serving Native American reservation communities in the states of Montana, North Dakota, South Dakota, Oregon and the Navajo Nation. TBICs are SBA resource partners. They offer small business owners computers, one-on-one business counseling services and business management workshops. (XXIV - IRI, 1998, p. 53)
Canada/British Columbia Business service Center (Hosted by the BC government, this site is full of practical advice, exploring tips on small business opportunities, and how to become an employer.)
Costco Connection (999 Lake Drive Issaquah, WA 98027 425-313-8510. Costco publishes Costco Connection, a lifestyle magazine for small businesses.)
Internal Revenue Service (free products, developed especially for the Small Business/Self-Employed person, and obtain updated information on existing products. Order today online or by calling 1-800-829-3676.)
Information and Resource Center page
Sources and Information for Business Start-Up and Expanding or Operating an Existing Business
The following information can be referenced in the XXIV Institute on Rehabilitation Issues (IRI), 1998 publication "People with Disabilities Developing Self-Employment and Small Business Opportunities", pp. 53-58)
TERMS and LOAN INFORMATION
Owner's Equity - This is the owner's investment in the business.
Partnership - Joining forces with a partner is a possible strategy for providing either financial support for the business or for the partners to bring to the business their respective strengths. For example, a talented electrician who has limited telephone, ordering, organizational, scheduling, customer service, office, and bookkeeping skills could go into business partnership with someone who is skilled in those areas.
Purchase Order Loan - The purpose of this type of loan is to provide working capital to a business. This is a short-term loan where funds are loaned for eligible costs against a signed purchase order. The widespread availability of this type of loan is unknown.
Equity Financing - Funding is provided in return for part ownership. Ownership might be through a general partnership where the individual participates in management, decisions, and profit; limited partnership where there is no say in the management or decision making and liability is limited to the investment; and stockholders of a corporation who invest by purchasing portions of the company.
Family & Friends - Family and friends are the most frequently-used source of business financing. Often family and friends are co-signers for bank loans.
Grant Money - Currently there is no stable and consistent resource for grant monies for people with disabilities who want to start businesses.
Loan Pools or Peer Lending - Using peer lending, loans are based on the integrity of an individual and his or her character not on assets or collateral. Borrowers form a group of 4 to 7 people for the purpose of borrowing monies to improve or expand a small business. Each member of the "borrowing group" owns his or her own business. Each member must prove to the group that his or her business can repay any loan monies borrowed. It is the responsibility of each member to repay his or her own loan. All loans must be up-to-date and current before anyone can borrow more monies. The group, as a whole provides monitoring, networking and support. An example is Women's Economic Growth (WEG) in Weed, California, which was formed in 1988 to improve the economic self-sufficiency of women in Siskiyou County, California. BankAmerica Community Economic Development Initiative funds support WEG's peer lending program. WEG offers training and technical assistance (in lending and borrowing), peer support, and step-up loans ($1,000 maximum for the first loan, $2,000 maximum for the second loan, etc., based on the group's repayment history and overall performance). All of WEG's services are designed to prepare borrowers to move on to other public and private lenders. Peer lending groups complete a six-week certification process so they may act as their own loan committees. Group members work together to resolve business problems and deal with delinquencies. This approach, while labor-intensive, reduces the risks for both WEG and the borrower.
Microloan Organizations - Generally these are nonprofit agencies that make loans of less than $10,000, usually to targeted groups. However, some agencies are providing larger loans - up to $25,000.
Banks and Commercial Lending Institutions (including credit unions) - These loans generally are hard to obtain. A potential business owner will be expected to contribute a minimum of 10 percent towards the business before the bank will consider a loan. Additionally, a bank will require collateral (e.g., real estate, vehicle) or co-signer for the loan. Many commercial lending institutions also offer the following loans that are guaranteed through the Small Business Administration. However, the author of one book (Zuckerman, L. 1990) states that most banks will not make an SBA guaranteed loan for less than $100,000.
Venture Capital -Venture capitalists invest in businesses owned by people who are "experts in their field," with a high profit margin, growth rate, and with a proven market.
Guaranteed Loan Program - These are loans made by private lenders, usually commercial banks, on which payment is guaranteed for up to 90 percent of the unpaid interest and principal balance in event of default by the borrower. The purpose of the guarantee is to assist the borrower in obtaining loans from private lenders by providing additional collateral needed to secure the loan.
FUNDING RESOURCES
Small Business Innovation Research Program (SBIR) (This SBA program provides qualified small businesses with opportunities to propose innovative ideas that meet the specific research and development needs of the Federal Government. Through a very competitive process, awards are given for a feasibility study to evaluate the scientific and technical merit of an idea. These are called Phase I awards and they are awarded for up to 6 months. In Phase II awards are granted, again through a competitive process, for up to 2 years to expand on the results of Phase I. Phase III uses private sector or non SBIR federal funds to commercialize the results of Phase II.)
SBA's Microloan Program (This SBA program is offered through many microloan organizations)
7(a) Loan Guaranty (Through 7(a) the SBA guarantees loans to small businesses that cannot obtain financing at reasonable terms through normal lending channels. The program is designed to promote small business formation and growth. Loans are available for many business purposes, such as real estate, expansion, equipment, working capital or inventory. The SBA can guarantee 75 percent of the loan amount up to $750,000. For loans of $100,000 or less, the guaranty rate is 80 percent. The maximum interest rate is 2.75 over the prime lending rate. Loan periods are for up to 10 years for working capital and up to 25 years for fixed assets. The following are the loan types offered through the 7(a) program.)
Low Documentation Loan (LowDoc) (This program was developed to reduce paperwork for loans of $100,000 or less. In order for the lender to request a LowDoc guaranty, the applicant must fill out a one-page application and meet all of the lender's requirements. Approval relies on the strength of the individual applicant's character and credit history.)
CAPLines (CAPLines is for financing a small businesses - short-term, cyclical working-capital needs. CAPLines funds five types of short-term working capital loans: the Seasonal, Contract, Builder's, Standard Asset-Based, and Small Asset-Based. Under CAPLines, the SBA generally can guarantee up to $750,000.)
FA$TRAK (This is a new loan program. It is being piloted with selected banks nationwide. FA$TRAK encourages lenders to make more small loans to the small business community. Participating banks can use their own documentation and procedures for loans of up to $100,000. In return, the SBA will guarantee up to 50 percent of each loan.)
Minority and Women's Prequalification Loan (This program allows the SBA to prequalify a guaranty for loan applications of $250,000 or less before the applicant goes to a bank. The program evaluates an applicant's key financial ratios, business history, loan request terms, character, credit, experience and reliability, rather than assets. Designated intermediaries work with a business owner to review and strengthen her loan application. This program is available through a number of SBA district offices nationwide. To find out if it is available in your area contact your nearest SBA district office.)
Certified Development Companies (A Certified Development Company is a nonprofit corporation set up to contribute to the economic development of its community or region. CDCs work with the SBA and private-sector lenders to provide financing to small businesses. There are about 290 CDCs nationwide. Each CDC covers a specific area. These organizations provide long-term, fixed-rate financing to small businesses so they can acquire real estate, machinery and equipment to expand their business or to modernize their facilities. Typically, at least 10 percent of the loan amount is provided by the borrower, 50 percent by an unguaranteed bank loan, and the remainder by an SBA-guaranteed debenture (maximum SBA debenture is $1 million).
Small Business Investment Company Program (SBIC) (SBIC's provide capital to small businesses through investment in the business or through loans. They are privately owned. They use their own funds plus funds obtained from SBA guaranties and/or from selling preferred stock to the SBA to invest in businesses. SBIC's operate on a for-profit basis. Although many SBICs invest in a wide variety of opportunities some specialize in certain fields or seek out businesses with new products or services with strong growth potential.)
Small Business Investment Companies - SBA listing and information.
Angel Capital Electronic Network (ACE - Net)
Surety Bond Guarantee Program - SBA information on this program.
Minority and Women's Prequalification Loan (This SBA program is offered through many microloan organizations.)
Social Security Administration (SSA) (In 1994, the Social Security Administration began a more concerted effort to increase employment of current and future SSA disability beneficiaries with the goal of increasing self-sufficiency and reducing dependency on the benefit roles. The programs developed through this effort are called Social Security Work Incentive programs. While most of these work incentives are used when a person with a disability goes to work for someone else, two of the programs, the Impairment Related Work Expense program (IRWE) and the Plan for achieving Self-Support (PASS) program, can be used for people who want to start their own businesses. Of the two programs, PASS is used most often for self-employment. This is interesting because for those who qualify, money from PASS provides an additional source of business funding that is not accessible to people without disabilities.)
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Impairment Related Work Expenses (IRWE) - An IRWE enables recipients of SSI benefits to recover some of the costs of work-related expenses incurred as a result of the disability.
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Plan for achieving Self-Support (PASS) - Under this Social Security Work Incentive Program, a person may set aside income and/or resources over a specific period of time to fund necessary goods and services to establish a business or to become a partner in an existing business. PASS funding may also serve as auxiliary funding to more conventional loan and business finance sources. The Social Security Administration requires a written PASS plan and a prepared business plan in order to authorize the implementation of this resource.
Veterans Administration (The Veterans Administration offers vocational rehabilitation services for veterans whose disability is service connected. Veterans with serious employment handicaps may receive self-employment assistance. Veterans who qualify for assistance, typically people with the most severe disabilities, are considered to require self-employment to achieve a positive rehabilitation outcome. These veterans may receive comprehensive training, minimum stocks of inventory or supplies, essential equipment, technical assistance through the period of start up and incidental services such as business license fees.)
Rehabilitation Services Administration (RSA) (Depending on an individual's needs VR agencies may use Section 110 funds to assist with opening a business. Amounts vary depending on the type of business. Another use of VR funds distributed in this manner is that they can be used to leverage funds from other sources such as a microloan program.)
Information and Resource Center page
The Loan Process
The following information can be referenced in the XXIV Institute on Rehabilitation Issues (IRI), 1998 publication " People with Disabilities Developing Self-Employment and Small Business Opportunities", pp. 58-61)
Although the process of obtaining a business loan may vary, it generally includes the following steps. For this example, the owner is seeking a loan of $50,000 and has good credit, ample collateral, adequate service record equity or owner's investment (a general rule of thumb is 10?33 percent of the total cash needed to start the business), then chances are that the lender will ask the borrower to complete a brief (two-page) financial statement to evaluate the bank's ability to approve the loan. The bank will consider the individual's character and credit rating, ability to meet payment obligations and repay the loan, capitalization of the business to insure that it is not undercapitalized and owner investment. A bank may not always request a business plan. However, it is likely to require one if the business does not appear to have financial strength or if additional information is needed. It usually is the "nontraditional" lenders that require a business plan. These are lending groups or agencies that have special programs or financing for potential as well as established business owners. Although these loans often are small when compared with bank loans and they have more lenient lending requirements, a business plan usually is required. The plan is required for several reasons. Many of these organizations do not have the stringent owner's financial strength requirements (assets and equity) that banks do. Start-ups and "riskier" situations need/require well-written plans for providing the feasibility of the business idea. Banks tend to focus on financial strength while nontraditional lenders tend to focus on feasibility issues, possibly because banks tend to fund ongoing businesses while nontraditional lenders tend to fund business start-ups.
There are many people who think that a business plan is essential no matter who funds the business because it assists with "thinking through" the business idea and examining key issues should be considered prior to embarking on a business venture. These considerations are questions that the lender will want answered and that the borrower should be prepared to answer. They include questions about marketing, such as who makes up the target market, how will the target market be reached, what research was conducted to learn about interest in the product, the business, viability, the industry, competition, what are the credentials of the business owner and any managers, and what will the loan be used for (e.g., will it cover costs and allow for additional working capital to avoid under-capitalization). There are a number of places that can provide assistance with developing a business plan including two funded by the Small business Administration: Small Business Development Centers, and SCORE. In addition to these two groups, there are specific economic development resources, programs, and organizations with their own unique services and/or perspectives that vary from city to city. Many of the available programs are concentrated in metropolitan areas, meaning that rural areas may not have many resources within their immediate vicinity.
The presentation to the lender can make or break the loan. After the financial plan is developed it should be reviewed for accuracy so the plan presented to the lender is professional, accurate and error free. To prepare for the funding meeting the business owner should have prepared the proposal and know it inside and out so he or she can answer all questions asked by the lender and defend all assertions. This will help the business owner be confident. He or she should dress professionally and speak confidently. In some circumstances there may be questions about the person's disability and his or her ability to run the business. It is up to the borrower's discretion, but it may help potential funders understand the disability's impact on the business if it is addressed during the meeting or in the business funding plan.
In a nutshell the applicant goes to the bank, the lender asks for either a business plan or a personal financial statement, the lender either is interested in making the loan based on ample assets, collateral, good credit, etc., or the lender is not comfortable and wants a guarantee to feel comfortable. If the lender is interested in making a loan it goes through various committees at the bank for approval. The time this takes varies depending on the bank. If the bank does not feel comfortable with making the loan, the lender decides to route the application through SBA to get a government guarantee. This usually takes two weeks. After SBA responds the lender either approves or rejects the loan. If the loan is rejected but the applicant is set on starting a business then nontraditional lenders typically are approached by the applicant. Nontraditional lenders seem to value the business plan while bankers, if it is a financially strong situation, can and will approve, in some situations based strictly on the financial.
Working with Lenders Similar to the SBA - lenders generally are not experienced with working with people with disabilities. Because of this and depending on a person's disability he or she might be more successful with obtaining a loan if the counselor and/or advocate anticipate questions that will be asked by the banker and engages in a role-play situation with the consumer prior to his or her visit to the bank and accompany the consumer to the loan interview. At the loan interview the counselor provides support in the process. The type of support is based on the person's needs. For example in the case of a person with a severe speech impediment who might not be understood, the counselor relays the necessary information. For the person with an emotional disability, the counselor provides emotional support but generally does not speak for the individual. For a person who has not been employed for an extended period and who has insurmountable fear of dealing with the unknown, the counselor will help the person through the rough spots. Additionally, this would be the time for the counselor to provide technical information about accommodations for the disability within the business context of questions that arise during the interview. It is important to note that in these situations the counselor is present as an advocate representing and supporting the individual, not conducting the interview him- or herself.
Information and Resource Center page
Opportunities for VR's Participation in Community and Economic Development
The following summary is taken from the IRI 24th Issue publication "People with Disabilities Developing Self-Employment and Small Business Opportunities.", pp. 61-63
VR agencies should participate in a community's economic development to support developing businesses or to create business opportunities and jobs for consumers of VR services. VR agencies may need to partner with another local or state organizations such as an economic development group, an independent living center, a research and training center, or a consumer group in pursuit of these activities. The benefits of participation are that VR becomes a recognized contributor to the community, becomes a partner with other community development organizations and is included in planning for business expansion and upcoming employment opportunities; and as a result is contacted and considered as a possible partner when other opportunities arise. Foundations and government grants are two of the most frequently-used methods for obtaining funds to develop or expand demonstration projects. Often, though these funders expect that their money will be used to only develop or test a project and that the demonstration will be self-sustaining or find other more stable community or state-based sources of support.
Foundations - Foundations are always looking to fund quality organizations, programs, and innovative projects that promote change. Foundations generally grant money to nonprofits who then disburse funds in the form of grants or loans. They give money for good and for opportunities and success, not for needs or distress. The key phrase to remember about a foundation is "for social and/or public benefit." So when approaching a foundation, it is important to offer hope and vision and to remember that grants are investments for social benefit. There are approximately 22,000 active foundations across the United States. Annually, they receive more than 1 million requests for funding, but fund no more than eight percent of them. The reasons for nonfunding typically are because the application topic did not match the foundation's interest, the applicant organization does not have a track record or name recognition, or because of a low quality proposal. One other important factor is that, if a board of directors exists, that board members are known for their expertise in areas and that they are representative of the organization's mission statement. Depending on the foundation and the applicant organization, a board of directors and committees may need to be established. For example, some University-based Robert Wood Johnson grantees do not have a board of directors, while private Robert Wood Johnson grantees do. In either case, it is important for the applicant organization to have a clear and understandable mission statement. The organization must show that it is responsible, has developed sound by-laws, does not have a conflict of interest if awarded a grant, that it has fiduciary responsibility, and can adequately protect public interest through independent audits. Additionally, the applicant organization must prove that it satisfies the needs and expectations of the community by fulfilling its mission statement through periodic evaluation of the program's performance.
When applying for foundation funds, the applicant organization should recognize that ego is deeply involved in giving by foundations. Therefore ego must be respected and even played upon by the applicant. The grant writer should refer to foundation updates, corporate giving books, and the National Directories as a way to identify the foundation's interests. When a possibility is identified, also note the name(s), background, other affiliations, and interests of the President or Chief Operations Manager, Program Managers, and Board of Directors and Trustees. With this information the executive director or a member of the board of the applicant organization can get a foot in the door, develop a relationship, and increase the odds of getting a grant request approved.
There are four types of foundations: independent, operating, company sponsored, and community. Independent or private foundations are the largest funders. They have independent boards, are professional, and cover a broad range of interests. Their income usually is from family wealth, benefactors, and individuals who share the foundations? interests. Operating foundations make few, if any grants to organizations outside the scope of staff interest. Company sponsored foundations obtain their funds from profits of their sponsoring company. They are a conduit for corporate giving. Grants generally are small but can be up to $100,000. Generally, grants only are given in areas where the sponsoring company does business. Program interests vary. Community foundations generally give grants only in their own area. They receive their funds from local companies, organizations, and residents. These foundations usually are classified as public charities.
When deciding whether or not to apply for foundation support the applicant must be convinced that the program or project meets a "true" need; that it provides a convincing solution to the identified problem; that the scope of the proposed project/solution relates directly to the scale of the identified problem; and that foundation support is clearly outlined in light of other funding sources such as fees for service or other ways of obtaining resources such as donations.
U.S. Department of Agriculture Rural and Community Development - Another possible avenue for VR's participation in community and economic development is for an agency to pursue funding from the USDA Rural Business and Cooperative Development service (RBCDS). RBCDS was established in 1994 to "enhance the quality of life for all rural Americans by providing leadership in building competitive businesses and cooperatives that can prosper in the global trading marketplace." RBCDS have developed Business Programs, usually available to rural areas outside the boundaries of a city of 50,000 residents, by guaranteeing loans through eligible entities or intermediaries and by assisting public bodies, nonprofit corporations and recognized Indian Tribal groups with financing and developing small and emerging private businesses. Detailed information and applications for financial assistance are available through Rural Economic and Community Development state offices.
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Programs and Resources for Minorities and Women
Small Business Administration (The Small Business Administration funds the Minority Enterprise Development (MED). Link here to go to the Minority Enterprise Development (MED). This program, commonly known as the 8(a) program, was created to assist small companies owned and operated by socially and economically disadvantaged persons obtain access to a variety of business development services including the opportunity to receive federal contracts on a sole source or limited competition basis. Under 8(a), SBA enters into prime contracts with federal departments and agencies who then subcontracts with disadvantaged small businesses that are certified to participate. The following assistance is available to eligible program participants who are in the developmental stage: sole source and competitive 8(a) contract support, grants to participants of surplus property and technology owned by the United States, and training to enhance program participant's skills in the area of business principles. In the transitional stage 8(a) provides sole source and competitive 8(a) contract support, grants to participants of technology and surplus property owned by the United States Transfer of technology or surplus property owned by the United States, training to enhance program participant's skills in the area of business principles, assistance with forming joint ventures, and training and technical assistance in business planning to help ensure the firm's successful transition from the 8(a) program to the competitive market. Program participants are also eligible to apply for financial assistance under SBA's 7(a) and 504 programs.
U.S. Department of Commerce (Under the U.S. Department of Commerce, the Minority Business Development Agency (MBDA). Link here to go to the Minority Business Development Agency (MBDA). The Minority Business Development Agency (MBDA) promotes the establishment and growth of competitive minority-owned businesses. The MBDA awards grants and cooperative agreements to state, county, and city government agencies, profit and non-profit business development organizations, and trade associations to provide management and technical assistance, and market development services to minority entrepreneurs. MBDA does not provide grants or loans for business start-up, expansion, or acquisition. But MBDA does assist minority entrepreneurs with locating financing from banks, other private organization or government agencies. The MBDA publishes Minority Business Today, Entrepreneurship, Profiles, and the Business Development Center Directory which is a listing of MBDA-funded Minority Business Development Centers (MBDCs), Native American Business Development Centers (NABDCs) and Minority Enterprise Growth Assistance Centers (MEGAs). Current MBDA initiatives include the following:
1. Financial Capital Initiative to increase the availability of debt and equity capital for minority-owned businesses.
2. Surety Bonding Initiative to increase minority business access to conventional sources of surety bonding for major commercial construction projects.
3. Franchise Initiative to assist minority entrepreneurs with making more informed decisions about the risks and rewards of franchising.
4. International Trade Initiative to assist minority-owned firms with becoming "export-ready."
5. Telecommunications Initiative to generate investment capital for minority entrepreneurs entering the highly competitive, technology-intensive telecommunications industry.
6. Native American Initiative was created to address the special problems of the Native American firms and individuals interested in entering, maintaining or expanding their efforts in the competitive marketplace. NABDCs (Native American Business Development Centers) can provide service to any minority client, but are designed to focus on the unique business needs of the Native American.
U.S. Department of Transportation (DOT) (For almost twenty years, DOT's DBE program has been providing equal opportunities for women and minorities competing for highway and transit contracts. One of the programs under its umbrella is the Office of Small and Disadvantaged Business Utilization (OSDBU) which offers DBEs the opportunity to obtain short-term working capital at prime interest rates for transportation-related projects under its Short-Term Lending Program. Link here to go to the Office of Small and Disadvantaged Business Utilization (OSDBU). Certification is required, however, no additional certification is needed for firms certified under the U.S. Small Business Administration under Section 8(a). Short-term working capital is provided in the form of a revolving line of credit with a maximum line of credit is $500,000 with interest rates at prime rate. A bonding program is also available to obtain bid, payment and performance bonds for transportation-related projects.)
Resources for Women
Online Women's Business Center (Sponsored by the SBA. The goal of the WBC is to provide entrepreneurial women with the information and expertise they need to plan their economic independence through owning their own business. WBC's online forums, message boards, resource database, links, and informative articles are tools we offer free of charge-providing women the information they need to succeed in business.)
Women's Connection Online (Women's Connection Online offers women on the Internet relevant, useful content and discussion groups. There are over 1,100 pages of the most current news on women's issues, bulletin boards, a news archive containing the last 30 days of news related to women, plus an extensive library covering business, politics, health, finance, gender equity and many other topics, information about women's organizations, links to women's sites on the web, and a regionalized events calendar.)
Women's Business Centers (This co-sponsored SBA program provides women with long-term training and counseling in all aspects of owning or managing a business, including financial, management, marketing, technical assistance, and procurement. At the time of this writing, there are nearly 70 Women's Business Centers nationally in 40 states.)
Women's Network for Entrepreneurial Training (WNET) (This SBA program is available through SCORE and SBDCs. It is a year-long, one-on-one program where established women business owners serve as mentors to protegees who are ready to expand their businesses. There also is a WNET Roundtable, which provides mentoring and support for women business owners in a group setting. (XXIV - IRI, 1998, p. 53)
SBA's Office of Women's Business Ownership
Women's Business Ownership Representatives - Access in the District SBA Offices.
Women-Owned Small Business (WOSB) Procurement Program - Access to information and summary of this SBA program.
Women's Business Institute (Institute to improve the opportunities for economic and business growth for women in North Dakota, Minnesota and its surrounding region.)
African American Resources
African-American Web Connection (This site provides a doorway to Afrocentric web resources for the African American web community and others seeking the total black web experience.)
Black Business.com (link site for business related resources.)
Asian American Resources
Asian Business Web Page (3246 W. Sepulveda Blvd., Suite 109 Torrance, CA 90505, 1-310-517-0087. Asian Business Web Page provides Internet programming, web page design, on-line advertising. Asian Business Web Pages are in both English and Chinese or other Asian Languages when appropriate. The Asian Business Web Page Hot Links Section provides both local and worldwide links to its users.)
Hispanic Resources
HISPANIC Magazine (98 San Jacinto Blvd., Suite 1150 Austin, TX 78701. 512-476-5599. HISPANIC Magazine's web site highlights articles from back issues and provides links to other Hispanic web sites.)
LatinoWeb (201 N. El Molino Ave. Pasadena, CA 91101 626-440-0476. Latino Web is a virtual information center for Latino Resources. Latino Web's mission is to empower the Latino community by providing a gateway to the Internet where private, nonprofit, and public sectors can exchange information freely.)
HispanicBiz - Business Resources Instant Communications (7654 Coral Way Dublin, CA 94568. 510-828-7350 - ext. 3. This site provides a one-stop information services for small businesses, professionals, and students in California and worldwide.)
Latin American Trade Council of Oregon (16200 Pacific Highway #16 Lake Oswego, OR 97034. 503-699-0646. The Latin American Trade Council of Oregon is a nonprofit association organized to promote trade between Oregon and Latin America. LATCO members can exchange information through conferences, workshops, a newsletter, an Internet e-mail list, on-line forums and a member directory. LATCO makes available reports on specific trade opportunities in various Latin American countries.)
Hispanic Chamber of Commerce (110 Broadway, Suite 25 San Antonio, TX. 1-210-222-9077. Tristero empowers businesses, organizations, and individuals by delivering on-line media. It enables them to create reliable, flexible, state-of-the-art turn-key solutions to share information with the world.)
The Latino Economic Development Corporation, Inc. can be contacted at 2316 18th St. NW, Washington, DC 20009-1815. 1-202-588-5102. Helps low income Latinos obtain housing by using government funds and directs Latinos to nonprofit organizations that procure funds for business development.
Native American Resources
Bureau of Indian Affairs (The Indian Financing Act of 1974 provides guaranteed loans, direct loans, and grants to tribes, tribal members, and Indian organizations for establishing, expanding, or purchasing a business on or near a reservation when financing is not available from normal sources. Eligible may be of any type, including agriculture. Direct loans are made directly from the U.S. government through the Bureau of Indian Affairs. Direct loans are made under the following criteria: Applicants must demonstrate they are unable to obtain funds from other sources, including the BIA loan guaranty or grant programs; the maximum amount is $350,000 for individuals; and the applicant must have equity equal to 20 percent of the total cost of the business to be financed.)
Oklahoma Native American Business Development Center - operated by T3RC Associates 2727 E. 21st, Suite 102 Tulsa, OK 74115. 1-918-743-1115. provides free business start-up, financial management, financial analysis, marketing management, business plans, and procurement assistance for Native Americans. They serve all minorities for a fee of $10/hour.
Tribal Credit Programs - some tribes have initiated credit programs to serve members. In many instances, interest rates are very attractive and offer an alternative funding source for persons seeking to start their own business.
American Indian Chamber of Commerce can be contacted at 2727 East 21st, Suite 102 Tulsa, OK 74114. (918) 743-1115 - FAX: (918) 743-1422
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Books
Many books on starting a business or on developing a business plan are available at bookstores and libraries. The following list is just a few of those books.
The Business Planning Guide (6th Ed). Book & Software. David H. Bangs, Upstart Publishing, Inc.
Anatomy of a Business Plan (3rd Ed). Linda Pinson & Jerry Jinnett, Upstart Publishing, Inc.
How to Really Create a Successful Business Plan: Step-by-step Guide (3rd Ed). David E. Gumpert, Inc. Publishing.
Directory of U.S. Microenterprise Programs published by the Self-Employment Learning Project of the Aspen Institute, 133 New Hampshire Avenue, N.W., suite 1070, Washington, D.C.
Business Plans for Dummies: A Reference for the Rest of Us, Paul Tiffany & Steven D. Peterson, IDG Books Worldwide.
Government Giveaways for Entrepreneurs II (4th Ed), Matthew Lesko, Information U.S.A.
On Your Own: A Woman's Guide to Building a Business (2nd Ed), Laurie B. Zuckerman, Upstart Publishing, Inc.
Starting and Operating a Business in (State): A Step-by-Step Guide, PSI Research, The Oasis Press/PSI Research, Grants Pass, Oregon.
The Perfect Business, Michael LeBoeuf, A Fireside Book Published by Simon & Schuster.
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GLOSSARY
Collateral: Assets pledged to secure a loan.
Disabled Veteran Business Enterprise (DVBE): A disadvantaged certification, in some states, relating to a business owned (51 percent minimum) by a U.S. disabled veteran having a military service-connection of 10 percent or greater.
Development Stage (SBA): SBA determines length of participation in the 8(a) program in two stages, one of which is the developmental stage which is four years and is designed to help 8(a) certified firms overcome their economic disadvantage by providing business development assistance.
EC: Enterprise Community
Economically Disadvantaged Individuals (SVA): Those individuals whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities, as compared to others in the same or similar line of business and competitive market area who are not socially disadvantaged. For the purposes of program entry, an individual whose personal net worth (excluding the equity in their personal residence and business) exceeds $250,000 will not be considered economically disadvantaged.
EZ: Enterprise Zone
Home-based business: Working out of home in either a self-employment setting or tele-commuting arrangement.
Franchising: To run a unit of a business or be granted permission to distribute a manufacturer's products or services.
Microenterprise: Sole proprietorship, partnership, or family business, that has fewer than five employees, does generally not have access to the commercial banking sector, and can initially utilize a loan of under $15,000.
Minority Business Enterprise (MBDA): A minority business enterprise is a commercial undertaking that is owned or controlled by one or more socially or economically disadvantaged persons. Such disadvantage may arise from cultural, racial, chronic economic circumstances, background or other similar cause. Such persons include African Americans, Hispanics, Asian Americans, American Indians, Eskimos, Aleuts, and Hasidic Jews.
Partnership: An unincorporated business owned by two or more persons.
Self-Employment: For the purpose of providing self-employment options as a rehabilitation service in a state-federal program, self-employment means the consumer owns, manages and operates the planned endeavor and is not considered to be an employee of another person, business or organization. Self-employment is an acceptable employment outcome for vocational rehabilitation agencies under federal law.
Small Business (SB): To be eligible for SBA loans a small business must be independently owned and operated and not dominant in its field. Depending on the industry, size standard eligibility is based on the average number of employees for the preceding 12 months or on sales volume averaged over a three-year period. Examples of SBA maximum size standards are:
Manufacturing - The maximum number of employees may range from 500 to 1500, depending on the type of product manufactured.
Wholesaling - The maximum number of employees may not exceed 100.
Services - Annual receipts may not exceed $2.5 to $21.5 million, depending on the particular service being provided.
Retailing - Annual receipts may not exceed $5 million to $21 million, depending on the particular product being provided.
General and Heavy Construction - General construction annual receipts may not exceed $13.5 million to $17 million, depending on the type of construction.
Special Trade Construction - Annual receipts may not exceed $7 million.
Agriculture - Annual receipts may not exceed $.5 million to $5 million, depending on the agricultural product.
Socially Disadvantaged Individuals (SBA): Those who have been subjected to racial or ethnic prejudice or cultural bias because of their identities as members of groups without regard to their individual qualities. The social disadvantage must stem from circumstances beyond their control. In the absence of evidence to the contrary, the following individuals are presumed to be socially disadvantaged: Black Americans, Hispanic Americans; Native Americans (American Indians, Eskimos, Aleuts, and Native Hawaiians); Asian Pacific Americans (persons with origins from Japan, China, the Philippines, Vietnam, Korea, Samoa, Guam, U.S. Trust Territory of the Pacific Islands (Republic of Pilau), Commonwealth of the Northern Mariana Islands, Laos, Cambodia (Kampuchea), Taiwan; Burma, Thailand, Malaysia, Indonesia, Singapore, Brunei, Republic of the Marshall Island, Federated States of Micronesia, Macao, Hong Kong, Fiji, Tonga, Kiribati, Tuvalu, or Nauru; Subcontinent Asian Americans (persons with origins from Indian, Pakistan, Bangladesh, Sri Lanka, Bhutan, the Maldives Islands or Nepal); and members of other groups designated from time to time by the SBA. Applicants are charged with establishing social disadvantage on the basis or clear and convincing evidence.
Sole Proprietorship: An unincorporated business owned by an individual.
Transitional Stage: SBA determines this stage to be five years and is designed to help participants overcome the remaining elements of economic disadvantage and to prepare participants for leaving the 8(a) program.
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Updated: 7-27-05