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North Bay Business Journal

Monday, October 25, 2010, 3:45 am

SBDCs see major funding cuts

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    Additional California, SBA efforts will help to restore programs

    SANTA ROSA – Funding to the Small Business Development Center programs including those in the North Bay has been cut dramatically, but help is on the way.

    The centers are located nationwide and provide management assistance to current and prospective small business owners.

    The mission of the SBDC is to offer one-stop assistance to individuals and small businesses by providing  information and guidance in central and easily accessible branch locations. The program is a cooperative effort of the private sector, the educational community and federal, state and local governments and is an integral component of small business training and counseling services.

    But funding recently has been slashed through budget cuts to the community college system within which most SBDCs are operated.

    Lorraine Duvernay

    “We have about 25 percent of the budget we normally work with,” said Lorraine DuVernay, executive director of the SBDC at Santa Rosa Junior College.

    The 10-year average for assistance to businesses is 4,646 hours of counseling to 843 clients. To date this year, 276 clients have received 929 hours of counseling.

    There is some hope, however. In the jobs bill that passed this month, an allocation of $50 million was made through the SBA to go directly to SBDCs. California will see roughly 10 percent of that, and the $5 million will be distributed across the state to the SBDCs here.

    Additionally, Gov. Arnold Schwarzenegger  signed Assembly Bill 1632 which will provide an additional $6 million to California SBDCs.

    “The additional $50 million in federal funding will be an enormous boost to the national SBDC network for small business technical assistance,” said Ms. DuVernay. “Our Center will be able to increase one-on-one counseling immediately upon receipt of our allocation.  Now that the California Small Business Assistance bill passed as well, the SBDC will be able to further expand counseling to support small business recovery.”

    “It is a huge commitment by the state to the SBDC network and to small business,” she said.

    According to the State Treasurer’s Office, which administers this program, the appropriation has the potential to leverage over $135 million in loans, serving 1,000 businesses and creating or retaining 3,200 jobs.

    “It is a time of flux in the system,” said Charlie Monahan, who works with the SBDC in Napa.

    “What we had to do with the loss of the state funding, was to allocate our resources. We had people coming over every two weeks and now they are coming every three or four,” he said.

    He said that instead of the counseling one-on-one, there have been a lot of homework assignments given out.

    “With startups we have to be more careful to direct them to our start up classes. That way when we get them in for counseling, they have a better sense of where they are at,” he said. “I feel people are getting what they absolutely need. I don’t think someone has called here and not been able to help, but we are leaner.”

    Ms. DuVernay said that in order to get counseling, people have to do more work and be more serious than they used to be.

    “We are interested in helping entrepreneurs, not people starting a business to create themselves a job,” she said.

    Additionally, there is a lot more paperwork to fill out before a client can come in for assistance.

    She said this helps the client flush out ideas to maximize the time they spend with the counselors.

    Gone are the days when someone with startup capital could come in with six business ideas. People need to have a firm grasp on what they are doing and why, she said.

    With the federal and state funding, it seems the SBDCs will be around, but officials said it just will be some time until they are up to the level of service they are accustomed to providing.

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