Best Practices

Best Practices in Economic Development: Big Bucks for Small Business

Published Feb 02, 2012 by Maria Meyers
NetWork Kansas announced that during 2011, 12 Entrepreneurship (E-) Communities successfully raised a total of $1.2 million in donations to establish or supplement local loan funds used for small business growth.

The E-Community partnership emphasizes development of community resources to create a flourishing entrepreneurial environment; of which financial capital is an important component. The participating communities were awarded a combined total of $900,000 in tax credits, enabling them to raise $1.2 million to be loaned to local businesses in their communities.

"It is exciting to see our E-Community partnerships expand. The injection of capital is certainly important, but, just as importantly, we are beginning to work systematically with our partner communities to learn about best practices that generate startup activity and business expansion, introducing youth to entrepreneurship, and how to engage the banking community and share what we learn with our E-Community partners," said Erik Pedersen, director of E-Communities.

About E-Communities

Network Kansas’ E-Community program, now in its fifth year, has grown from 6 communities in 2007 to 30 in 2011 and has raised more than $5.9 million for loan funds for Kansas entrepreneurs. These funds are estimated to generate more than $34.9 million of investment in rural businesses across Kansas.

Since 2007, NetWork Kansas E-Communities have loaned or granted $1.6 million to more than 70 businesses in their communities through this funding source and leveraged an additional $9.3 million dollars of investment, for a total investment of $11 million dollars into businesses in E-Communities. This funding has spurred the creation or retention of 386 jobs in these same communities and has immeasurable positive effects on the entrepreneurial ecosystems of these participating areas.

Kansas entrepreneurs who are not located in one of NetWork Kansas' 30 E-Communities may be eligible to apply for low-interest loans through the statewide StartUp Kansas loan program, which is also funded through the Kansas Entrepreneurship Tax Credit.

Since 2006, the StartUp Kansas program has raised a combined total of more than $6.77 million in donations, which will generate an estimated $47 million of investment in Kansas businesses. StartUp Kansas has awarded a total of $3.58 million to businesses, leveraging an additional $25 million for a total of $28.7 million in total investment in Kansas businesses. Fifty-eight percent of businesses who have been awarded NetWork Kansas funding are located in communities with fewer than 5,000 residents.

Combined, the NetWork Kansas E-Community and StartUp Kansas programs have stimulated the creation or retention of more than 1,200 Kansas jobs.

NetWork Kansas facilitates the development of a network within participating communities that grows and connects various factors proven to be vital to the establishment of an entrepreneurial ecosystem. Some of these factors include availability of financial capital, support by local leadership, and development of educational resources. All of these factors combine to increase entrepreneurial activity in participating towns, leading to increased startup activity, business expansion, job creation, and more.

Funding for the establishment of a local loan fund for E-Communities is generated by using Kansas Entrepreneurship Tax Credit allocations, which are then distributed in the form of matching loans and grants to new and expanding businesses through a competitive application process administered by a local leadership team.

To learn more about the E-Community Partnership, contact:
Erik Pedersen, Director of E-Communities