Rethinking Small Business Development Funding: A New Approach for Rural Communities

Let’s talk about the elephant in the room. It was already difficult to come up with the funds to assist with small and microbusiness development, but in the current climate, it’s becoming nearly impossible.

For a long time, many local business development initiatives have relied on government-backed grants. And they’ve worked. But lately, those grants are fewer, more competitive, and slower to award. It looks like the federal money is drying up, even as the need grows.

Even in communities that once used funds from their budgets to support these efforts, we’re seeing hesitation. Rising costs and economic uncertainty are causing many municipalities to hold onto those funds, unsure if the grants and tax funds they once relied on for other critical projects will be available when needed.

We’re hearing it everywhere:

“The grant we always receive funding from rejected our application.”

“We applied for the grant, but it’s still in review six months later.”

“We had to pause our small business development program because our funding source didn’t renew.”

“The city has decided to only fund infrastructure projects this fiscal year.”

Sound familiar? So what now?

The need hasn’t gone away. If anything, it’s more urgent. These tiny businesses are often the heartbeat of our local economies. If they go, our communities suffer.

Exploring Local Funding Solutions

Here's a funding idea worth exploring - Local Partners.

How To Find Local Funding Partners

When mapping a microbusiness ecosystem, we always include banks, utilities, large employers, hospitals, and community foundations. While these are not microbusinesses or always direct microbusiness resource providers, they may be excellent community partners.

When we find and develop local partners who see the value in microbusinesses and are willing to co-invest in microbusiness development, we aren’t just filling gaps - we’re strengthening the very ecosystem that keeps our communities going.

How Can Funding Partners Help Microbusiness Development

Cultivating local partnerships can be mutually beneficial. Your local microbusiness development projects can be funded, and the partner receives good publicity and additional ways to invest in the community. Here are two ways local partners can help you fill your microbusiness development funding gap.

Create a Local Small Business Fund

• Collaborate with local partners to seed a community-driven fund dedicated to microbusiness growth.

• Use the fund for things like business startup grants, microloans, or covering first-month rent for new downtown businesses.

  
  

Build a Sponsorship Network

• Approach potential partners who want to give back and offer them tangible opportunities to support entrepreneurs.

• Think event and program sponsorships, scholarships for business education programs, or community challenges that highlight and support local makers.

  
  

What other partnership ideas do you have?

Creating Funding Partnerships In Your Community

At SmartStart, we believe that building a thriving local microbusiness ecosystem doesn’t have to hinge on the next grant cycle. It’s about getting creative, building local partnerships, and spreading the vision of what could be.

Developing these partnerships could be a key to unlocking the potential of your microbusiness ecosystem. They could be what you need to rally support from the rest of the community.

Success Stories of Local Partnerships

SmartStart's Director Of Next Steps, Leigh Ann Brown, put this partnership funding model into practice in her roles as EDC Director and Chamber of Commerce CEO with great success. Check out her webinar outlining her process - Engaging Local Funding Partners.

If you would like Leigh Ann to personally guide you through the process, contact us at info@smartstartcommunity.com.

The Future of Microbusiness Development

As we look to the future, it’s clear that traditional funding sources are changing. We must adapt and innovate. Local partnerships offer a fresh perspective and new opportunities.

Have you worked with these types of partners in your community? What did that look like? Let us know!

Together, we can build a robust support system for microbusinesses that will revitalize our local economies and foster entrepreneurial growth. Let’s make it happen!