Locals concerned over proposed state cuts to small-business center

Feb. 27—Area business leaders are pushing back against a recent proposal by Gov. Chris Sununu to end state funding for a business advisory group, a move they say would hurt local economies.

That plan, part of the two-year state budget that Sununu, a Republican, proposed earlier this month, would reduce funding for the N.H. Small Business Development Center to $50,000 next year before eliminating it entirely in 2023.

Founded in 1984, the state’s SBDC offers free advice to small businesses — companies with fewer than 500 employees — on subjects like growth strategies, marketing, supply-chain development and accounting, according to its director, Liz Gray. The organization helps approximately 3,000 Granite State businesses each year, though Gray said that figure grew significantly last year in response to the COVID-19 pandemic, when it reported a total economic impact greater than $166 million.

SBDC, located at the University of New Hampshire in Durham, has multiple regional offices, including one in Keene, and is among a national network of 62 small business development centers — including at least one in every state — that receive funding from the U.S. Small Business Administration. The federal funds for the N.H. SBDC, which Gray said are $756,000 in 2021, are contingent, however, on its matching half of that contribution with cash from other sponsors.

Since that secondary support has primarily come from the state, Gray said, Sununu’s proposal to eliminate funding could hamstring its operations considerably.

“The state’s match is critical for us to continue offering the level of business-advising support and other educational programs that we offer,” she said.

In a written statement to The Sentinel this week, the governor’s office said it would redirect resources from SBDC to efforts to enact tax cuts for small businesses and invest in workforce development. The governor’s office suggested the organization turn to the state university system for funding to match its federal contribution.

But Gray said she hopes state officials will restore funding for SBDC.

“We have appreciated the state’s support for the past 36 years and hope that the state will continue to support this very important program,” she said Friday. “The university has provided us with significant cash and in-kind resources for 36 years.”

Gray said it would be a particularly damaging time to cut support for small businesses, since many are dealing with financial issues created by the pandemic.

To meet demand for its assistance, the state SBDC used emergency federal aid to add six new staff members last year and now employs 19 people, according to Gray. She said the organization advised more than 7,000 businesses in 2020 — more than double its typical activity.

“Businesses across the state and across the nation are still struggling from the pandemic,” she said. “It is going to be several months, if not several years, before they are able to recover more fully and get back to where they were pre-pandemic. The resources that we offer businesses are very valuable.”

N.H. SBDC clients reported that the organization helped them raise more than $45 million in new capital and increase sales revenue by nearly $10 million last year, Gray said.

One of those clients, David Collise, said ending state support for SBDC would be “terrible” for business owners like himself.

Collise, a former restaurant and boarding school chef, opened Reel Deal Deli in Charlestown last July. He said SBDC advised him for months on how to handle bank loans, interpret financial statements and run marketing campaigns.

“I’m a chef,” he said. “When it came to that part of opening my own business, the amount of help they gave me was huge. I wouldn’t have been able to do it without them.”

Collise has continued to work with SBDC in the time since opening, which he said has been “pretty rough” because as a new business, he wasn’t eligible for COVID-related government relief like many other companies. He has also recommended SBDC to other local business owners, specifically noting that its services are complimentary.

“That’s an enormous help,” Collise said “… To have such an awesome resource right at your fingertips is amazing.”

Prominent local leaders have also taken notice of Sununu’s proposal to end support for SBDC, which has a regional office at the Hannah Grimes Center for Entrepreneurship on Roxbury Street in Keene.

Hannah Grimes Executive Director Mary Ann Kristiansen said SBDC has “been a core part of our operation” as a business incubator and called the governor’s plan “puzzling.” Keene Mayor George Hansel said he and the state’s other mayors discussed the issue at their most recent meeting and plan to write a letter opposing the move.

On Thursday, the Greater Keene and Peterborough Chamber of Commerce’s board of directors unanimously approved a resolution opposing the governor’s plan. The board wrote that it is “troubled” by the proposal to eliminate SBDC funding and urged state lawmakers to fund it at current levels.

“We are an economy and culture of small businesses, and hundreds of them wouldn’t be thriving the way they are without the hands-on guidance of SBDC,” the resolution states. “We hear over and over again from our members that SBDC has been a critical part of their success.”

Chamber President Phil Suter said SBDC is a valuable resource for small business owners, who he said bring an entrepreneurial spirit but often aren’t familiar with the logistical minutiae of starting a company. He echoed Gray’s concerns about eliminating those resources when many local firms remain saddled by the coronavirus pandemic.

“I think that this is a really bad message to be sending to the small business community around the state and in the Monadnock Region,” he said. “… To pull away some of the investment that we, collectively, have in the small businesses at this time just seems shortsighted.”

In response to the administration’s stated intent to redirect SBDC funding into tax cuts for small businesses, Suter said such moves often have a limited impact because the companies’ revenues are low, compared to large corporations.

“When we talk to businesses … that’s not the first thing they bring up,” he said. “They bring up things like we need better broadband or we need better roads.”

An earlier budget proposal from the N.H. Department of Business and Economic Affairs would have slashed state funding for SBDC from its current annual level of $440,000 to $100,000. The organization did not receive advance warning from the Sununu administration that it planned to eliminate those funds entirely, according to Gray.

“We were surprised by the significant reduction in the proposal,” she said.

Gray recently began speaking with state lawmakers, who will draft the next budget proposal, about restoring funding for SBDC in that version, she said. She added that the organization has received an “outpouring of support” from clients and partners around the state since Sununu proposed cutting its funding.

“It gives us a lot of hope for a bright and sustainable future,” she said.

Caleb Symons can be reached at 352-1234, extension 1420, or csymons@keenesentinel.com. Follow him on Twitter @CalebSymonsKS.

Source: https://news.yahoo.com/locals-concerned-over-proposed-state-193500420.html

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