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SBA, MDA programs help small businesses develop

The U.S. Small Business Administration and the Mississippi Development Authority, both charged with helping small businesses develop in the state, offer numerous programs and services. The problem is, not enough small business owners know about them.

According to the state of the state business report unveiled this spring by the GodwinGroup and the Mississippi Economic Council, 71% of Mississippi businesses have never taken advantage of a state tax incentive or a government-funded employee training program. Among smaller employers, with 10 to 29 employees, the number is as much as 15% higher.

Stacy Broadhead, vice president of Broadhead Lumber Co. & Manufacturing in Mendenhall, is like most small business owners. He’s so busy running a hands-on operation that “there’s no way we can know about everything that’s going on in the small business arena.”

“As a small business owner, you’re pretty much in your own little capsule,” Broadhead said. “We rely on the Simpson County Development Foundation to tell us about grant money, bond money, the latest trends in financing and other information we need to know to keep growing. Without their help, we’d never know about many of the programs and services available.”

Approximately 146,500 small businesses are located in the state, representing more than 85% of the total business population. Minorities, women and veterans own 57,371 small businesses. Of that group, women and African-Americans own 71% and 26%, respectively. Asians, Hispanics and Native-Americans account for 3%, 1% and 0.2%, respectively, according to the SBA.

“The increase in our loan volume we’re experiencing this fiscal year, as compared to this time last year, gives us a good indication that small business start-ups and those existing businesses in need of financial assistance to develop and grow in Mississippi are certainly on the rise,” said Janita R. Stewart, SBA Mississippi District Director.

“Our loan volume remains up, even in comparison to other SBA offices in the southeastern region as well as in other parts of the nation,” Stewart said. “It appears that when the economy shows a slowdown, as it has for the past several quarters, lenders seem to turn to SBA to place guarantees on loans made to small business, which in part attributes to the increase in lending activity. SBA in Mississippi has made 345 loans for almost $90 million. We still have three months remaining in the current fiscal year, and if volume remains at least steady, we may make between 425 and 450 loans, whereas last fiscal year we made 383 loans from our 7(a) and 504 programs. Stewart said the SBA is also seeing an increase in the number of firms being certified into the SBA’s Section 8(a) Business Development Program, where currently 52 firms are certified in the state with dozens of applications in process.

“The relatively new HUBZones Empowerment Contracting Program is getting more publicity. As more companies become aware that their businesses are located in a designated HUBZone, they proceed to become certified, which is a very easy, electronic process,” she said.

Industries that have been hardest hit in the current economic downturn include a slowdown in the poultry, garment manufacturing, trucking and furniture industries, Stewart said.

“SBA has made over 1,000 loans to small business (poultry) growers in our state, to the tune of more than $367 million over the past 10 years, with less than 20 of these loans in liquidation status,” she said. “These loans have proven to be ‘good loans.’

“The Mississippi Business Finance Corporation partnered with SBA on many of these loans by providing 20% interest free financing to the borrower. We have, however, seen a slowdown in requests for these loans, over the past couple of years, although this industry now appears to be on a slight comeback. Other industries hard hit are the cut-and-sew operations due to NAFTA; the trucking industry has been impacted due to the increased price of fuel; and it is understood that the furniture industry will be negatively impacted, due to the importing of foreign-made furniture.”

According to the MDA, 11 machinery manufacturers have closed this year, including two closures June 28.

Even though the SBA does not generally deal with workforce issues, the agency was involved in the Welfare-to-Work Program for nearly three years, Stewart said.

“We in Mississippi exceeded our goal of 1,534 (referrals) by providing to the Mississippi State Department of Human Services over 2,000 requests from small businesses who were in need of work-ready employees,” she said.

J.C. Burns, MDA executive director, said workforce development is a major component of the Advantage Mississippi Initiative.

“Mississippi has a quality workforce and this gives us the competitive advantage for attracting higher wage jobs,” he said.

Small business owners can find workforce assistance through the Employment Training Division of the MDA, which administers the Workforce Investment Act (WIA) in Mississippi. The WIA forms the framework for the Workforce Investment Network (WIN) in Mississippi, the state’s new one-stop system designed to streamline access to information on employment and training opportunities. WIN Job Centers, located across the state, are the system’s hallmark.

“At the WIN Job Centers, employers have access to a database of qualified skilled workers, and center staff can assist the employers with recruiting and screening new candidates for employment,” said Stephen Martin, a spokesperson for MDA.

Other center services for employers include assistance with writing job descriptions, proficiency testing for employees and free access to the Internet to post job listings or review resumes. WIA pays up to 50% of the cost of customized training, with a commitment from the employer to employ an individual on successful completion of the training.

On-the-job training benefits small business by reimbursing the company for its cost of training employees. Employers train qualified applicants that are placed in jobs. These applicants earn a regular salary and benefits. Employers are reimbursed up to 50% of the cost of the employees’ wages during the training. The length of time for reimbursement for training depends on the occupation.

Small businesses can participate in a number of employment training programs through the Job Training Partnership Act (JTPA). They include industrial start-up programs, on-the-job training, dislocated worker assistance, non-traditional employment for women, individual referral, classroom training, senior worker assistance and youth programs.

Participation in the JTPA programs includes welfare recipients, laid-off workers, economy disadvantaged youth and senior individuals 55 or older, handicapped citizens, school dropouts, veterans, teenage parents, offenders and alcoholics or drug addicts.

“Businesses participating in JTPA programs gain employees who have already been recruited, screened, trained and tested,” said Martin.

“Employers choose the applicants best suited to their needs from a pool of well-qualified, technically-trained candidates.”

Contact MBJ contributing writer Lynne Wilbanks Jeter at lwjeter@yahoo.com or (601) 853-3967.


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