Business, Small business

How community banks are helping small business and job growth

More community banks are getting federal approval to dole out funds to small businesses. The more funds disbursed to those business owners, the more opportunities for job growth.

Small businesses put roughly one-half of all Americans to work, according to the U.S. Treasury Department’s press statement, and they make up nearly 60 percent of gross job creation.

The Small Business Jobs Act approved nearly a year ago created s $30 billion Small Business Lending Fund.  This Fund gives community banks with assets less than $10 billion to help support small businesses. The Treasury invests in each of the banks by purchasing Tier 1-qualifying preferred stock or equivalents. So far, the Treasury has disbursed a total of $1.8 billion from the program to 130 banks.

The Treasury began approving applications for the nearly 900 community banks that applied in July out of the 7700 eligible community banks. The program sent out a total of $123 million in the first wave to six community banks. The program is set to expire September 27, which will mark the one year anniversary of the enactment of the Small Business Job Act.  Lawmakers and lobbying groups have been disturbed by the slow process and have urged Treasury officials to speed up the distribution of the funds. The Treasury claims it has to make sure the banks are good, and it expects to make more announcements in the coming weeks.

Photo credit: anankkml

Business, Education, Investments, Small business

Forging Relationships Between Community Colleges and Business with Virtual Incubators

The White House wants to help speed up high-growth entrepreneurship, and it’s looking at a familiar method for support.

scottchan / FreeDigitalPhotos.net

 An entrepreneurial company’s survival during the critical start-up period is often helped with business incubators. These are programs that offer businesses support services and resources, such as office space, lab facilities and access to financing. Among the programs’ goals are getting firms to the point where they can successfully create jobs, revitalize neighborhoods, commercialize new technologies and strengthen local and national economies. They vary in types and organizational structure.

 Business incubators have been around since the 1950s and have evolved with technology. They were popular for building Internet businesses between 1999 and 2001. Internet incubators appeared in droves and promised “entrepreneurs everything from marketing and accounting assistance to office space and computer equipment,” the Seattle Post-Intelligencer reported in the fall of 2000. In fact, “these hothouses of the Internet economy looked to create entirely new companies in half the time it took other businesses to get off the ground.”

More virtual incubators are on the rise, and today they’re considered “social networks that try to provide the mentoring and collaborative benefits of an incubator without the physical space,” the New York Times recently described.

The White House is taking note. A new government campaign called Start-Up America is encouraging these incubators to help link community colleges with businesses so the economy continues to recover. The American Association of Community Colleges (AACC), which represents nearly 1200 community, junior and technical colleges, was recognized in a White House announcement last January for selecting colleges in 10 states to pilot a Virtual Incubation Network. These colleges include Burlington County Community College in Burlington, New Jersey and Rio Salado College in Phoenix, Arizona. The initiative is getting a $995,500 grant from the Charles Stewart Mott Foundation to launch the pilot project this year, according to the AACC news release.

“Close to 35 business incubators are operated by two-year colleges nationwide,” according to the AACC statement. “The development of the virtual incubator network recognizes that these services need not depend on a traditional brick-and-mortar facility. Instead, the new network will ‘test-drive’ new delivery mechanisms that include support provided at the business site and hybrid in-person and technology processes.”

 AACC will put the initiative into action with the help of the National Association of Community College Entrepreneurship. The AACC will ultimately work with the national network of Small Business Development Centers.

What are some ways virtual incubators have helped? What new trend are you seeing with business incubators?

Photo Credit: Scottchan / FreeDigitalPhotos.net (http://www.freedigitalphotos.net/images/view_photog.php?photogid=1701)