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The government has a vested interest in small businesses succeeding and employing people. High employment correlates with better health outcomes and a decreased strain on the health care system. Also, employment equips people with money to live, skills to contribute to the economy, and much more. Small businesses, while a big part of these goals, struggle to endure when they face challenges. To help, the government offers assistance. Here are some ways the government helps small businesses to succeed.
The Government Helps Small Businesses Secure Loans
Perhaps the single biggest reason small businesses falter or fail is that they do not have liquid funds to press onward. This prevents businesses from realizing potential innovations, stifles their growth, and can even force them to close up shop. To ensure that small businesses with a bright future have cash on hand to navigate the instability of their infancy, a government agency called the Small Business Administration (SBA) offers help in securing a loan.
This avenue allows ready access to loans while reducing the overall riskiness involved. These loans are often competitive with private loans, require comparatively low down-payments, don’t require collateral, and may even come with counseling services to explain them thoroughly.
It Provides Grants for R&D and More
Many small businesses have excellent ideas for products or services that will fill a need if developed thoughtfully. The SBA can connect these businesses with grants for research and development so they can make these concepts a reality. This simplifies an otherwise intimidating process and breaks down barriers to innovations that could benefit the entire country. The government also connects certain demographics with grants—one prime example being veterans. There are currently programs to assist disabled veterans, prospective female entrepreneurs, and many more groups.
It Educates Small Business Owners
Another way the government helps small businesses is through education. Often, money isn’t enough for small businesses to endure, but with some financial knowledge, their viability improves. That’s why the SBA provides business counseling services, and the IRS walks business owners through what their tax situation could look like. There are even government sites featuring private business owners that offer not only their general knowledge but their comprehensive attention and mentorship for new small business owners. Programs like these strive to include those who don’t have powerful networking connections or industry knowledge.
It Assists in a Crisis
As so many small businesses face the consequences of the coronavirus crisis, there are several things they can do to survive, including taking advantage of the recently-passed CARES Act. This relief act provides more potential resources to businesses during this time, including a paycheck protection program that incentivizes retaining employees. Before this crisis, though, there were already disaster relief programs in place. A hallmark of the recent CARES Act and general disaster assistance is extremely low-interest loans that give businesses an infusion of cash as they deal with a loss of income.