One of the challenges in economic development is accessing early-stage startup capital or seed capital. Funding gaps can make it very difficult to attract traditional sources of capital, such as banks. It often requires inventive and fresh strategies to get a business off the ground. One of those ideas is Individual Development Accounts (IDA). In an interview with Sarah Castagnola, Manager of Asset Lending for Mercy Corp NW, IDAs have become an effective tool in promoting small business development in the low-income communities of Portland, Oregon. All participants are vetted through an orientation, where they learn the basics of business plans and finances. If chosen, a participant opens a bank account and slowly accumulates money until they have saved $1,000, in either 6, 12 or 18 months depending on the participant, Mercy Corp NW will then match with $3,000 bringing the total to $4,000. The money can then be spent on hard assets only such as tools or equipment. The program currently has 110 active participants with 50% expanding businesses and 50% starting up businesses. The program is funded through the federal program "Assets for Independence" and an Oregon State Fund that is funded through the selling of tax credits to banks and individuals. Some of the challenges of the program are the marketing to individuals and the due diligence of the funds. Mercy Corp NW has focused more on the due diligence by cutting the checks to third party lenders and will not deposit the money directly into the account. The program is also limited to individuals below the 200% federal poverty line because of the federal funding standards. A success story of the program is a local CSA was able to buy tools, banners and equipment with the money raised and successfully launched their CSA program in the Portland Area.
- If your looking for a one stop shop for Federal grants go to www.grants.gov. Here you can search grants by Category, Agency or a Basic Search. You can also click on this weeks new opportunities to get a list of all grants that have just opened.
- Alaska Community Foundation just open their Competitive Grant Cycle. http://www.alaskacf.org/GrantOpportunities/TypesofGrants/tabid/177/Default.aspx
- Another clearinghouse for federal grants is the Catalog of Federal Domestic Assistance. You can search by keyword for specific project grants. https://www.cfda.gov/
- This is an excellent webinar done by Palo Alto Software for the Small Business Administration on how to create a business. http://www.paloalto.com/sba/
- Small Business Administration also offers a number of webinars and online trainings. This link will take you to their writing a business plan class.http://www.sba.gov/training/businessplanning/index.html
- This site has a series of webinars for grant writing from basic tips to effective grant research. http://www.grantgoddess.com/webinar.html#grant
