April 08, 2020


The challenges facing small businesses in Maine are well known, as, unfortunately, are their failure rates. But a vital federal program for the last couple of years has given these businesses in distressed areas a much better chance to succeed through federal contracting preferences. This program, however, called the Historically Underutilized Business Zone, or HUBZone, is only useful if business owners know it’s there and how to use it.

Earlier this week, Sen. Olympia Snowe, chairman of the Senate Committee on Small Business and Entrepreneurship, brought the new administrator of the Small Business Administration, Steven C. Preston, to Bangor to explain the links between government and business. The visit was valuable because it gave small businesses the chance to see the options the SBA offers to help businesses grow.

More Maine businesses haven’t taken advantage of the HUBZone contracts because when the funding was initially approved the federal government forgot that not only cities but rural areas had struggling businesses too. Minimum population requirements prevented many places in Maine from qualifying, but legislation by Sen. Snowe, currently in the SBA reauthorization bill, would change that and significantly increase the number of businesses that could benefit. Through the program, about 110 Maine firms in 11 counties won contracts worth a total of $12.7 million last year.

The small business economic forum covered several other ways Maine businesses could expand with federal support – for instance, the New Markets Tax Credit program, which Coastal Enterprise used to leverage a crucial loan for Katahdin Forest Management, providing capital and creating hundreds of jobs at Katahdin Paper Co. Similarly, the SBA’s Microloan program provides businesses with loans up to $35,000.

But as the editorial above on food stamps observes, sometimes what makes government more efficient is to simplify the process by which the public applies for support. With Health and Human Services, that meant a single application for all services. Sen. Snowe proposes putting an SBA counselor in the region full time to answer questions from local businesses and provide guidance for navigating the loan process.

Working with organizations such as Eastern Maine Development Corp., such a position could expand Maine’s access to federal funding while also explaining state and private options. The goal would be to avoid duplicating government efforts while streamlining the process for small business. Just knowing that someone locally is available to explain all the options could be the difference between success and failure in applying for loans and for the future of a small business itself.

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