Volume 3 Issue 11
Revitalizing Neighborhoods: How Economic Development Companies and Banks Can Fuel Economic Growth
By Lourdes Cortez
In the last decade, small businesses have become crucial to the overall economic growth in the United States. According to the US Small Business Administration, there are 28 million small businesses in America accounting for 55% of all jobs and 66% of all new net jobs since the 1970’s. The number of small businesses in the United States has increased steadily by 49% since the 1980’s. In addition, since 1990, big businesses have eliminated 4 million jobs, while small businesses have added close to 8 million.
The continued evolution of small businesses and entrepreneurship is a vital component to fueling job growth, which in turn ensures the well-being of the community. New Jersey is no stranger to the impact small businesses have on residents. New Jersey small businesses employ about 1.7 million people or 50% of the private workforce. Additionally, in 2013, over 27,000 new jobs were created via small businesses.
These statistics support the need for policy-makers and organizations to focus on providing assistance and guidance to help small businesses thrive and expand.
Organizations such as Economic Development Centers, credit unions or banks, offer financial products and services to support the sustainability and growth of a small business.
Economic Development Centers are a part of every state and local government. They support the community by offering services such as: start-up counseling, business planning assistance, recruiting services, management training, executive coaching, and financial resources. An Economic Development Center’s primary focus is to create strategies and resources that drive economic growth on a local, state and even national level. Strategies and resources include:
- Business real estate development, an instrumental service helping small businesses find the right location to establish their operations. Economic Development Centers have the resources to advise business owners which site will best suit their business, as well as information to further promote understanding of community demographics, which can be critical to the success of the business.
- Financial resources in the form of loans, as well as additional capital and tax credits.
- Business networking opportunities to help create partnerships and relationships that assist with sustainability. These resources allow businesses to connect and form business alliances with community leaders, policy-makers, industry peers, and entrepreneurs.
- Employee training is offered to provide businesses the opportunity to create a workforce that is knowledgeable and skilled.
Aside from Economic Development Centers, credit unions and banks play a crucial role in the support of small businesses, particularly in the area of financial management. By partnering with credit unions, small businesses can apply for a loan, order business credit cards, obtain a variety of banking services, and request assistance with bookkeeping. Strong financial management is essential to the stability of a growing business and its economic viability.
As an alternative to commercial banking, many small businesses have chosen to join the numerous local credit unions to assist them with their financial management. Unlike large banks, credit unions are celebrated for maintaining meaningful and extensive relationships with their members that go beyond the initial financial needs of their businesses. Members have access to comprehensive business accounts that rival larger banking institutions, in addition to personal accounts that support their family needs, such as holiday and vacation clubs, retirement accounts, home loans and personal checking/savings accounts.
All while offering the same level of accessibility and technical support as large banking operations. More importantly, credit unions typically provide these financial services at a much lower cost, which is always an attractive option for small business owners who are keeping an eye on their budget. By providing services, workshops, trainings, and resources that support the viability of small businesses, residents benefit by having access to local jobs and a thriving community to live, work and play in.
It is evident that money spent with a small business is re-invested back into the community. Small businesses help to provide a robust community brand, which help to bond residents together and encourage pride within the neighborhood. Small businesses also help to build-up the community and help to increase the overall neighborhood property value. By working together to insure policies and practices are created to benefit and support our small businesses, we are all guaranteed a healthier and more vibrant quality of life.