From April 17th through April 23rd, classes will be held in a dozen different locations around Bloomington-Normal to promote financial literacy as part of a community-wide program called Money Smart Week®.   Money Smart Week offers classes to anyone from the public that has an interest in learning about money matters.   The best part about Money Smart Week is that these classes are free to the public.  How smart is that?

Money Smart Week was created by the Chicago Federal Reserve Bank in order to promote personal financial literacy in the overall population.  While the program is just a decade old, it has already spread throughout the Midwest, and new cities are added every subsequent year.  Money Smart Week topics typically run the gamut from basic financial literacy all the way through complex investing strategies and retirement planning.

The EDC will be offering a series of three classes specifically focused on business financing on Friday, April 23rd in the community room on the 4th floor of the Heartland Bank building at 200 W. College Ave., Normal.  The first class, which starts at 2:00 PM, will cover topics related to financing a start-up.  The second class, which starts at 3:00 PM, will be devoted to financing business expansions.  The third, beginning at 4:00 PM, will be a general seminar on resources available to businesses in McLean County.  Representatives from the Illinois Small Business Development Center, the Illinois Department of Commerce and Economic Opportunity and Central Illinois SCORE will also participate in these courses.

To see more details on these classes and the rest of the great MSW offerings for 2010, make sure you check out the MSW Web site at  www.moneysmartweek.org/illinois. Money Smart Week is a registered service mark of the Federal Reserve Bank of Chicago.

Small Business Energy-Efficiency Assistance Program

The Environmental Health major at Illinois State University, in cooperation with the Economic Development Council of the Bloomington-Normal Area, is offering free assistance to small businesses in McLean County to take advantage of financial incentives to improve energy efficiency.  ISU students trained in basic energy auditing and energy efficiency can help small businesses identify energy efficiency opportunities, estimate financial assistance and potential savings, and assist in selecting and monitoring contractors.

Small business owners are often too busy with daily business operations to keep track of energy efficiency technologies and the various financial incentives that have been created to promote energy efficiency.  The Small Business Energy-Efficiency Assistance Program for Bloomington-Normal is intended bridge this gap and help business owners take advantage of existing opportunities.

Specifically, as part of the program, students will:

1. Meet with business owners to explain the program.

2. Perform a walk-through energy audit to identify significant energy efficiency improvements.

3. Estimate potential costs, savings and payback, given existing financial incentive programs. Financial incentive programs include:

•  Federal tax credits
• Ameren rebates and discounts
• Local assistance  (when available)

4. Work with the business owner, if desired, to identify potential contractors and solicit bids.

5. Work with the business owner, if desired, to evaluate bids and select a superior contractor.

6. Work with the business owner, if desired, to monitor contract performance and evaluate final results.

The program runs through May 1, 2010. The number of business clients that can be served is limited, so businesses will be added to the program on a first-come/first-served basis.

For more information, please contact Tom Bierma, Professor of Environmental Health at ISU – tbierma@ilstu.edu or (309) 438-7121 or Ken Springer at the EDC — ken@bnbiz.org or (309) 452-8437.

Cash is the lifeblood of business.  Without open access to capital, most of the businesses you patronize and depend upon daily would cease to operate.  Local economic development organizations play a pivotal role in ensuring that community businesses can draw this needed capital.  The process of assisting businesses in obtaining needed funds is called “economic development financing.”

Banks (the traditional source of business financing) and local ED organizations ultimately have different end goals.  Banks seek to generate profits through well-managed risk, while ED organizations seek to create jobs and capital investment in their community.  Having different end goals does not preclude cooperation between these two entities, however.  In fact, good economic development financing actually helps banks better manage risk and get more deals done.  The secret is something called “gap financing.”

Financing gaps occur when a project seeking funds cannot meet the necessary underwriting criteria for a conventional lender.  The project may have a shortfall in collateral, or it may be requesting more funds than the bank is comfortable lending for a number of reasons.  When this happens, economic developers can step in and fill the financing gaps using a variety of different loan programs.  The ED organization issues a loan just like the bank does, only it takes a subordinated position on the same collateral offered to the bank for the project.  In the rare case of a default, the bank gets first call on the collateral and the ED organization gets whatever is left.  This arrangement gives banks the risk cushion they need to lend the bulk of a project’s funds, and the project itself obtains the total amount of financing requested.  The ED organization achieves its goal of creating new jobs and capital investment in the community.

When used properly and prudently, economic development finance is an important tool for local businesses and a key method for helping to create jobs and opportunities for residents.

The Community Development Corporation of Bloomington-Normal (CDC) is a sister organization to the EDC that houses all of the EDC’s financing programs for businesses. Businesses of any size in need of financing options for growth can participate in one of the CDC’s four main financing programs.

The CDC has three financing programs:

• Microloans that range from $1,000 to $8,000
• Revolving Loan Fund I, which ranges from $50,000 to $250,000
• Angel Capital, which can reach upwards of $3 million

Participation in any of these loan programs is contingent upon each project’s potential for success. CDC financing is not a replacement for traditional borrowing. The EDC recommends that in every circumstance, businesses looking for financing should approach their local banker first before contacting the EDC. Also, please note that some CDC programs require application prior to starting the project, so it is important to involve the CDC as early as possible in the process.

To set up an appointment to discuss financing options, please contact Ken Springer at (309) 452-8437 or ken@bnbiz.org.

Oddly, in a country whose DNA is forged around the concept of rewarding personal risk, rational adults still believe that the government will foot the bill for them to launch their dream business.  These risk-averse entrepreneurs are egged on in their misconception of capitalism by late-night infomercials and internet shopfronts offering advice on how to unlock the secret world of government grants….for a price.  While the pursuit of free money to start a business may seem antithetical to the mores that built our nation, the entrepreneurial spirit espoused by those selling these useless guides cannot be doubted.

The unfortunate byproduct from this exchange is that economic development organizations will occasionally be contacted by someone who bought a book from a guy wearing a suit covered with question marks and who sincerely believes that we economic developers are sitting on a small mountain of cash to dole out to the first person who asks.  We try to be as polite to these folks as possible, but usually end up pointing them to an excellent myth-busting Web site called www.NOFREEMONEY.com.

Entrepreneurialism is the process of making your business dream a reality through persistence, risk and hard work.  The idea that the government will simply write you a check to start a business is delusional at best and un-American at worst.