Budget impasse threatens SBDC programs

By Jim Kendall

This column originally appeared in the February 29, 2016 Daily Herald

                Not much attention has been paid to the impact of the state’s budget issues on small businesses, but the collective thousands of businesses that Illinois’ 30 Small Business Development Centers serve each year are at risk: SBDC funding comes from a combination of federal, state and host-matched dollars.

Not surprisingly, the lack of state funds is the issue.

SBDCs provide an extensive list of small business-focused services that range from basic one-on-one management consulting to business plans and financial analysis. Nearly all services are free.

A big part of the current problem is the fact that 20 of the state’s 30 SBDC host organizations are community colleges or public universities, many of which have their own funding issues with the state. Peoria’s Bradley University is the lone private college with an SBDC.

In the Chicago area, where 18 SBDCs live, 10 educational institutions host SBDC programs.

Four SBDCs – at Rock Valley College, Rockford; Black Hawk College, Moline; Rend Lake College, Ina, and Illinois Eastern Community Colleges, a four-college consortium based in Olney – already have closed. Earlier this month, the SBDC at Southern Illinois University, Carbondale, said it would close March 31 unless state funds become available.

Center directors are worried, though the good news is that those I talked with have received financial support from their host organizations. The bad news: I didn’t talk with everyone.

“We’re going to stay open,” says Denise Ching, SBDC director at the University of Illinois at Chicago. UIC, she says, recognizes that “small business development is part of the local economy, and we have a role to play in helping local businesses.”

The College of DuPage “has been very supportive,” says Rita Haake, manager of COD’s Center for Entrepreneurship, in Lisle. “Back in November, our financial people made a presentation about budget issues to the Trustees, who approved (an internal temporary loan) to cover state funds.”

Harriet Parker, manager of the SBDC at Aurora’s Waubonsee Community College says Waubonsee “has committed funds” to keep the SBDC operating. Elgin Community College has made a similar commitment, “to cover salaries and benefits through the end of June,” according to SBDC manager Sybil Ege.

Outside the educational sphere, Karen Goldner, who runs the SBDC at the Women’s Business Development Center in Chicago, says that although “The state owes us money, we’re fortunate to have very diverse funding sources.”

The SBDC program in Illinois runs through the state’s Department of Commerce & Economic Opportunity, which seems to be doing what it can to send funds to SBDCs. In an email response to questions I asked, DCEO public information officer Kyle Ann Sebastian said the department is “providing federally funded grant agreements to all host organizations for the operations of their SBDCs in 2016.”

Federal funding, which comes from the U.S. Small Business Administration, normally is allocated as reimbursements of approved expenses. DCEO, however, apparently is distributing federal funding a little faster, to help with SBDC budgets.


© 2016 Kendall Communications Inc. Follow Jim Kendall on LinkedIn and Twitter. Write him at Jim@kendallcom.com. Listen to Jim’s Business Owners’ Pod Talk at www.kendallcom.com/podcast.