Now there’s one-stop shopping for entrepreneurs seeking business funding. Launched in December, the website New Equity Business lets small business owners and startups search an extensive database for business loans, grants, and even tax incentives.
Sharon Jones, a lawyer who focuses on diversity and inclusion, founded the site with Chinwe Onyeagoro. In addition to connecting fledgling businesses with necessary funding, Jones said the founders hope the site will serve as a job creation tool by helping small businesses to launch and grow, despite the down economy.
Here are excerpts from my talk with Jones:
Q: How does New Equity Business connect small business owners with funding sources?
A: Our site is an online portal. It has about 27 different financing types. Small businesses can fill out the profile pages to help target the search. You could say how much money you’re looking for [and] where your business is located. If you’re a startup, you could say where you’re thinking about being located. That matters because some funding, especially government grants and tax incentives, is tied to specific geographic areas. The site will provide you with grants, loans, credit cards, and tax incentives that could be applicable to your business. It gives you detailed information about each item. If there’s a particular grant the SBA has, for example, it will give you the site where the grant is. It describes general information about the grant and it gives you a link, so you can go directly to that site for more information.
Q: Why is this service necessary? How would small business owners access this information otherwise?
A: This site is an integrated source for financing information for small businesses. Before we launched, if you were a small business and wanted to get a loan, you would generally just try a bank nearby you. With this site, you’re able to access loan products nationally. It’s a little bit like what LendingTree did in the residential mortgage market. Originally, you only applied for a mortgage from a bank in your city. With LendingTree, you could apply for a loan with a bank anywhere. A lot of banks have the ability to do loans for small businesses across state lines. You don’t have to be limited.
On the grant side, there is no real single source. You have to go to each governmental entity to see if they have grants. Then you have to search their sites. It’s a very fragmented market and very time-intensive. The last part [relates to how] you always hear the stories about how every city wants [Fortune 500 companies] to move to their city. They have tax benefits. Some of those tax incentives are available to small businesses, but small businesses don’t have a way to access them. Our site makes it all available online.
Q: Are you finding that funding is still ample for small businesses, even with the economy as it is?
A: There may be more grants and tax incentives available now than before the economy went bad. The government put in some resources. The loan market is smaller now than it was before 2008. You have more need for this site to find the banks and non-banks that are lending for your particular needs. In the small business market, banks specialize. When you’re a small business, you don’t have time to go door-to-door trying to find a bank that will loan for your type of business.
Q: You don’t charge small businesses for this service. How do you make money on the site?
A: We won’t be charging for searches. We have some enhancements planned for our site, which we’ll be launching later this year. They’re not search-related, but they’re more premium services that we will charge for.
Q: What services do you provide other than searches?
A: There is news and information on the site. We have an educational series that explains the different types of financing. A lot of people don’t know the difference between a grant and a loan. We explain that difference. We talk about angel financing and venture capitalists. We have stories of businesses that obtained some of the financing we have on the site to expand their business. We aggregate news articles on small business financing.
We have consultants [called] New Equity Business navigators. They help small businesses apply for grants. Federal grants are usually very complicated. It’s helpful that you have assistance if you don’t know how to do it. These consultants are available to small businesses and the site will recommend consultants to match the financing resources the site provides.
Q: What’s next for the site?
A: We’re going to build a video library in different sectors. We’re planning videos, for example, if you have a professional services type of firm. We’re probably going to have one that focuses on physicians’ offices. The types of financing products available to them are somewhat unique, so we will have videos help take people through that process.