Daria Meoli//October 19, 2015
Daria Meoli//October 19, 2015
“Jersey City has expanded incredibly in just the last three years and there are a lot of people who live in the downtown area but get their beauty services done in the city because there are no salons offering hours that are convenient for commuters,” David said. “I’ll be open seven days a week and open longer hours to accommodate the large number of people who are commuting to the city every day.”
While she’s an expert on cuts and color, David realized she was less of an expert on cash flow and contracts. She contacted the Newark-based Women’s Center for Entrepreneurship Corp., or WCEC, where she entered the Supplementary Entrepreneurial Establishment Dollars program.
The yearlong S.E.E.D. program, as it’s also know, includes seminars and classes on everything from business planning to public speaking.
The S.E.E.D. program also holds a business plan competition that offers five program graduates a grant funded in part from the state’s New Jersey Office of Faith Based Initiatives.
David won the third-place prize — a grant for $4,000.
From a big picture perspective, $4,000 to open a brick-and-mortar business may not seem significant. But for David, who gathered additional capital from a few sources, the grant helped her make sound decisions about some of her subjective, variable startup costs.
“The grant gave me the opportunity to buy high-end equipment that I probably would have passed on,” David said. “While I was seeking the rest of my startup money and talking to investors, a large chunk of my equipment already was purchased, which made me more attractive to investors.”
A hair salon getting seed capital from the New Jersey Office of Faith Based Initiatives is just one example of the unexpected places small business owners can find financial assistance.
And where a small business can find funding one day, it can find a closed door the next. For entrepreneurs who rely on state funding to keep the lights on, keeping up with the available grants is like playing a game of Whac-A-Mole.
Mary Potasek is a co-founder and president of Newark-based Simphotek.
Founded in 2008, the company offers technical software packages used by the medicine, telecommunications and energy industries for using or calculating laser light.
State lenders step in when grants dry up
While small businesses’ opportunities for state grants rise and fall like the tide, the state Economic Development Authority does offer funding to support commercial loans and microloans to qualified businesses.
The EDA’s Small Business Fund provides financial assistance to qualified small, minority- or women-owned businesses through direct loans, participations or guarantees, with fixed interest rates. More than $12 million has been provided to 50 businesses through the Small Business Fund since 2010, with an average loan size of more than $240,000.
The EDA also has a “Loans to Lenders” program that provides loans through nonprofit third-party lenders known as Community Development Financial Institutions, or CDFI.
Since 2010, CDFIs across the state have provided more than $1.5 million in loans to small businesses through Loans to Lenders funding, and more than 50 percent of the businesses supported are minority- or women-owned.
One such CDFI is the UCEDC, a Cranford-based nonprofit economic development corporation.
“Some banks won’t lend to startups,” said Ellen McHenry, senior director of financial programs at UCEDC. “Businesses may be doing well, but may only be 18 to 21 months in business so they can’t get a bank loan. They may have a lot of customers, but they need additional cash to buy inventory.”
Shirley Corsey owned a health care IT consultancy business when she decided to open a medical coding and electronic health record training school in Camden County.
Through the UCEDC, she took advantage of the Community Advantage program, which helps businesses that have been open for a while, but may not have the collateral for a loan. The Community Advantage program offers loans between $50,000 and $250,000 that are funded by the state and issued through the CDFIs.
“It’s been about two and a half years since I got my loan, and I’ve been able to use it wisely,” Corsey said. “That loan was really the spark I needed to get my school up and running. The state of New Jersey has some great programs. And if you aren’t in it, you don’t now about them. You have to go after these programs. As small business owners, these are the things we need to get going.”
Currently, Simphotek’s main emphasis is on software for laser-assisted cancer treatment.
“In our company’s formative years, we were fortunate enough to receive state grants,” Potasek said. “But, the state cut out nearly all that grant money several years ago.”
The list of state grants Potasek’s business received that have now dried up include: New Jersey Commission on Science & Technology or NJCST Bridge Grant, NJCST Incubator Seed Fund and Edison Innovation R&D.
“We’ve offset the loss of state grant money with federal money and by reducing our salaries to practically nothing,” she said. “It’s been a difficult funding situation.”
According to Potasek, neighboring states have maintained their small business grant programs, making it increasingly attractive for some small businesses to pull up stakes from New Jersey.
“I see a difficult road ahead for New Jersey small businesses,” Potasek said.
For small businesses not leveraging state grants for sustenance, but for growth, savvy entrepreneurs keep their ears to the ground and their eyes on the headlines.
Shirley Corsey, founder and managing director of Health Care Information Technology School of New Jersey, based in Cedar Brook, recently received a grant from the state Department of Labor and Workforce Development as part of the Atlantic City Re-employment initiative.
“Because I followed the news about the casinos closing in Atlantic City, I found out U.S. Congressman Frank LoBiondo and U.S. Sen. Cory Booker got $29 million for the state Department of Labor and Workforce Development to provide grants for training programs for unemployed casino workers and other affected workers in the area,” Corsey said.
Corsey was awarded $85,230 to provide medical coding training for the Atlantic City-area workers.
“I don’t get intimidated by paperwork,” she said. “It’s a lot of work and I don’t have a magic wand. When I wrote the proposal for this grant, I focused on my ICD-10 coding curriculum because I knew that was going to be the next in-demand workforce in the health care industry.”
Corsey added ICD-10 medical coding curriculum to her school in March. For the last 30 years, medical offices and hospitals used the ICD-9 coding system as a means to bill insurance companies for their services. As of 2015, that code has completely changed and is now called ICD-D. This sizable shift in the medical coding field opened up a lot of opportunities for people who know the new codes.
Since being awarded the grant money in June, Corsey opened an office in Atlantic County.
“This business, for me, is so rewarding,” Corsey said. “With my curriculum and the way I deliver it, I really feel like a pioneer. Health care IT was a great career for me and now I have a school where I help a lot of other women advance in the careers as well.”
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