business funding sources

Money, where do we get it? Look local! Your Economic Development Corporation has money to give

At one time or another there is one thing all entrepreneurs need: that thing is money. This is true whether you are a rural entrepreneur or a big shot developer in the city. Regardless of what the money is needed for, it is almost always needed at some point in your entrepreneurial life. If you are lucky enough to already have the money needed for the project in question then you are OK, but if you don’t have the money it can be a problem.

When Tori and I bought our first business we did it the traditional way, we went to a bank, put 20% down and got an SBA loan. That 20% down payment represented our entire retirement savings. We were betting our retirement on the assumption the business we were buying would be a success. Mind you we were buying a business in a field neither of us had worked in; not a lot of pressure when you have a five year old daughter and a three year old son and have been laid off from two jobs in the past nine months.

But when you need money, going to the local bank is not your only option. If Tori and I had known of other options for getting money when we were buying our business we would have taken advantage of them. As a matter of fact I would advise you to look at alternate financial approaches every time additional funds are needed by you for your business. At least as the first step.

Locally controlled economic development organizations.

These groups are almost always created with the charter of attracting or growing businesses in their local area. Towards that effort they have financial (and sometimes other) resources available to help businesses.

These groups are everywhere, not just in cities or large towns. I currently live in a remote corner of very rural state, and there are four such organizations within 40 miles of where I live.

They are usually run by a board of directors or advisers that consist of local citizens, most likely local business owners or other members of the community. You may already know some of them (for good or bad).

economic development

These organizations have money and want to spend it to help businesses in their local area. Trust me I know of what I speak. I have been on the board of directors for one such group.

For example, as I write this I know the four organizations I mention above have over $1 million between them available for grants/loans to needful businesses or potential businesses.

Hit up any local Economic Development Corporation (EDC) in your area and visit with them and see what programs these organizations can offer to help you with the financial challenge you currently have.

There are guidelines these organizations must follow in handling this money, but they will work with you, they want to spend it to help local businesses. That is their mission. In the past I have been a board member of our local EDC, we couldn’t wait to loan this money away to deserving projects. In addition to loans, these organizations may also consider giving grants.

Don’t be afraid to ask for what you need, in my time on the board many of the requests we got were for very small amounts. Don’t be afraid to ask for a chunk of money if you need it regardless of its size. All that can happen is they say no.

But you need to have your act together when you approach these groups. They are going to want some information, the specifics on the information they need may vary from group to group, but you need to be able to provide the information they need. At a minimum you should have business plan, a real business plan. Not some notes on the back of a cocktail napkin, but a well thought out organized document.

The people on these boards who you will be interacting with are your fellow citizens, most likely other business owners. They are not going to be looking to tear apart your document, but they are going to want to see that you have a well thought out plan for the money they will be giving you. You need to have this ready for them, and you will need to do it yourself. No one is going to do this for you.

Remember you are on your own, but you are not alone.

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Bob Willis

Bob Willis is the Executive Director of Nebraska Rural Living and passionate supporter of rural entrepreneurship.
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