Governments offer many funding and other partnership opportunities to assist private enterprises. Businesses can benefit greatly from these public/ private partnerships, but first they need to be aware of what funding is out there. Awareness is often driven by government agencies, and industry and trade associations. However …
“There is no substitute for having a relationship with a trusted adviser who is well educated on both public and private funding mechanisms,” says Moore Capito, a shareholder at Babst Calland.
Smart Business spoke with Capito about public/private partnerships and strategies to better connect businesses with potentially helpful government opportunities.
Why isn’t there more participation in public programs by businesses?
How often or how readily businesses take advantage of government programs can depend on the type of program and the market sector. For example, agricultural businesses are heavy users of government programs — subsidies, for instance — because that’s been inculcated into that business segment. Many recent partnership opportunities have been geared toward the small business sector (i.e. Small Business Administration (SBA) programs; programs for Disadvantaged Business Enterprises; Minority-owned Businesses Enterprises; Women-Owned business Enterprises; and 8(a)/Minority or Women Owned Small Businesses; as well as SBA loans, including recent high-profile SBA loan programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan that were designed to support small businesses through the COVID-19 pandemic). However, there are plenty of existing government programs available to established businesses that are willing to take the time to look.
While lack of awareness can be a barrier, the administrative burden can also discourage participation. There tends to be significant paperwork necessitated by regulations designed for oversight. That takes time, and that can mean time away from day-to-day operations, something that not many businesses are positioned to absorb. Such regulations can frustrate the purpose of the programs because the true targets might find the time costs outweigh the financial benefits.
How has the Paycheck Protection Program increased overall awareness of government partnership opportunities?
The SBA’s PPP, offering forgivable loans to support small business payrolls through eight weeks of the COVID-19 pandemic, has shown that when attractive capital is put before companies, they’re going to snatch it up quickly. The initial PPP funds were exhausted in less than two weeks.
Long-term, a program like this could be something that triggers more interest among businesses in exploring other government programs. Perhaps, the awareness of the PPP loan program will cause businesses to look for other partnership opportunities. So, there’s some tangential learning that is likely to be a byproduct from this that stands to heighten awareness.
How do private businesses typically find out about public programs?
Good sources of information for available public programs are trade associations, chambers of commerce, farm bureaus, and business and industry councils. It’s also a good idea for businesses to call their local representatives, whether
at the state or federal level. Those representatives should be knowledgeable about what programs are out there.
Additionally, there are many tools available at the government level to help businesses succeed, even if they don’t consist of some type of funding. Some of these tools exist just to help steer businesses in the right direction, whether they’re established businesses or startups. Economic development entities are one example.
It’s always to a business’s benefit to be tuned in with what’s going on at the government level. The lesson from the current crisis is that it’s a good idea to develop a relationship with an adviser that can knowledgeably consult on the pros and cons of available programs and partnerships.
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