Nebraskans Can Benefit from the Nebraska Microenterprise Development Act
Every day we pick up the newspaper and read about the deepening financial crisis. We read about businesses closing because they can not find the credit they need to meet payroll, we read about major businesses and massive layoffs and we read about historic swings in the stock market and their affects on families across the nation.
What we do not read about is that part of the economy which is working, the local economic heroes in all of our communities – the microentrepreneurs and small businesses.
In Nebraska, 86 percent of businesses are microenterprises – those enterprises with five or fewer employees. Nearly one in five private, non-farm jobs in Nebraska’s non-metropolitan counties are in these small businesses. In Nebraska’s rural counties, nearly 70 percent of new jobs are in non-farm self-employment or small businesses. It is obvious that microenterprises and small businesses are a major part of Nebraska’s economy.
It is time we invest in these American heroes. In 2009, the Governor and the Nebraska Legislature will develop a new two-year state budget. This is the most important decision the Governor and the Legislature will make next year, the most important expression of what is important to our state and how we should invest our precious public resources.
Among the budget decisions the Governor and Legislature must make is funding for the Nebraska Microenterprise Development Act. In 2007, the Legislature and Governor deemed the need for capital and assistance for small business development important enough to provide $1.5 million per year for the Nebraska Microenterprise Development Act. Many members of the Legislature expressed the need to enhance assistance to the state’s entrepreneurs and small businesses because that is the primary economic development strategy that works for rural areas.
The Nebraska Microenterprise Development Act is a fabulously successful, national model for developing rural and urban small businesses. Since creation of the Nebraska Microenterprise Development Act in 1997, over 19,000 businesses and individuals in every Nebraska county have received loans and/or technical assistance as a result of its funding. And it’s a bargain at a price tag of less than $350 per job.
This relatively modest state investment also brings more resources into small business development in the state. For every dollar in state funds supporting the Nebraska Microenterprise Development Act, an additional $12 is leveraged from other sources like banks, other lenders and philanthropic sources.
Yet, there is so much more potential. Because of the need and the demand, the Nebraska Microenterprise Development Act currently serves three percent of the small businesses in Nebraska. And the market is expanding. A 2006 survey by the Gallup Company found 40 percent of Nebraskans have an interest in starting their own businesses. Many young people are interested in starting businesses as an attractive – often the only – way of remaining in or returning to rural Nebraska. New immigrants are demonstrating entrepreneurial drive in rural and urban communities. But the lack of support is holding them all back.
As the Governor and the Legislature develop the new state budget we believe Nebraska can make progress in reaching its entrepreneurial and economic potential by maintaining funding for the Nebraska Microenterprise Development Act at its current level. There can be no wiser investment than to provide opportunity and economic growth at a time of economic slowdown through capital and assistance to those businesses that create new jobs and innovation, particularly in rural communities.
Nebraska has done well in recent years to diversify their economic development portfolio through enhancing support of microenterprise and small business development. Nebraska has also been creative in promoting an entrepreneurial economy, particularly in rural areas, through innovative initiatives that are often the first or only of their kind in the nation. One such innovative initiative is the Nebraska Microenterprise Development Act. With our rural communities facing economic and demographic challenges, now is not the time to retreat from Nebraska’s national leadership role in microenterprise and entrepreneurial development. With economic storm clouds appearing on the horizon, now is not the time to retreat from investments that create opportunities, jobs and brighter futures.
