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Getting Help From Local Economic Development Agencies for Business Debt

Getting Help From Local Economic Development Agencies for Business Debt

Starting and running a small business can be extremely rewarding, but it also comes with a lot of financial risk. Many entrepreneurs take out loans or use credit cards to get their business off the ground, but unexpected challenges can make it difficult to keep up with payments. If you’re struggling with business debt, don’t panic – there are resources in your local community that might be able to help.

Understanding Local Economic Development Agencies

Economic development organizations exist in cities and counties across the country. Their goal is to support the growth and success of local businesses. Some common services they provide include:

  • Business training programs
  • Access to capital and financing
  • Tax incentives
  • Site selection assistance
  • Workforce development initiatives

Many economic development agencies also administer special loan funds or grant programs designed for small or start-up businesses in their area. The eligibility criteria and application process varies, but these programs can be an invaluable lifeline if you’re experiencing financial hardship.

For example, the Los Angeles Regional Economic Development Corporation offers the LA JumpStart microloan program for LA County businesses. Companies can borrow up to $50,000 with flexible terms and get free consulting on their business plan and financial projections.

Assessing Your Business Debt Situation

Before reaching out for help, take some time to fully assess your current business debt and financial position. Gather all outstanding loan/credit statements and make a list of who you owe and how much.

Some key things to look at:

  • Total balance owed across all accounts
  • Interest rates on each debt
  • Minimum monthly payments
  • Income and revenue trends – are sales growing or declining?
  • Upcoming big payments – taxes, licenses, balloons, etc.
  • Personal vs. business debt

This information will help economic development agencies understand your situation and needs. Be ready to explain the reasons behind your financial struggles – slow sales, loss of a big client, damage from natural disaster, etc.

Applying for Aid Programs

Once you’ve researched the options in your area, it’s time to reach out! Many agencies have an intake process where you’ll explain your business, struggles, and request for support.

Have the following ready to make a strong case:

  • A clear description of your business – when/how you started, products/services, customers, etc.
  • Your experience and credentials as a business owner
  • Financial records – tax returns, profit/loss statements, projections, etc.
  • Specific request – loan, grant, training, etc.
  • Impact – how will this aid help your business survive and grow?

The application may require documents like personal and business tax returns, bank statements, credit reports, and business plan.

Be cooperative, transparent, and patient during the process. It can take weeks or months to find out if you qualify and get approved.

Additional Ways Local Agencies Can Help

Beyond direct financial relief, economic development groups offer other resources to help stabilize and improve the health of your business:

  • Advising – Get guidance creating financial projections, improving operations, restructuring debt, etc.
  • Training – Take classes on accounting, marketing, HR, and other critical skills.
  • Networking – Connect with other local business owners for support.
  • Loan guarantees – Agencies can provide guarantees needed to obtain private financing.
  • Incubators – Some provide low-cost office space and shared services to nurture startups.

Don’t be shy about asking what other programs or general business advice they can provide! The goal is to help you succeed.

Partnering With Your Local SBA Office

The Small Business Administration also has offices all over the country focused on assisting small business owners. The SBA does not provide grants, but they have low-interest loan programs and surety bond guarantees that can help free up capital.

Many local SBA offices also offer free or low-cost training programs and business counseling. Find your closest regional office here to see how they can support your business.

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