Small Business Development Centers (SBDC) are shutting down in Illinois at an alarming rate. Three centers have closed in the South Central Illinois region leaving 22 counties without any affordable business plan development, counseling assistance, or business research services for small businesses. The Quad Cities' SBDC closed on Dec. 31, 2015 and so did the SBDC in Rockford, Illinois leaving another six Illinois counties without any business assistance programs. The primary reason for closures is lack of State funding now that Illinois is in its seventh month without a budget.
For those of you who do not know what the SBDCs are - they represent a network of business assistance centers developed in the early 1980s which are funded in part by the U.S. Small Business Administration and the State of Illinois. These centers help thousands of small businesses across the State of Illinois and the U.S. start-up and expand. Although they do offer business education their specialty is in helping small business owners and entrepreneurs prepare business plans that are used to procure loans.
Banks in Illinois should be taking a stand on these shut downs since they are dependent on good business plans in order to make good lending decisions. Large companies can afford to hire accountants and others to assist them with developing their business plans, but small start-ups do not have the capital to pay $2000-$3000 for a typical business plan to be prepared. In addition, small business owners typically do not have the business training or skills to complete the plans on their own.
Startup firms have been proven to be job creators. According to one study "gross job creation associated with startup firms from 1995 to 2005 was 3,000,000 jobs per year, as compared to 800,000 jobs created by firms in their first full year and 500,000 jobs created by firms in their third full year." T. Kane (2010) http://kauffman.org
I, for one, believe that the ramifications of closing the SBDC centers will be long term and will restrict economic development within the State of Illinois for decades. Unfortunately there does not seem to be, at the moment, a plan in place to reverse the trend.