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Loans and Resources for Disabled Entrepreneurs

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The SBA no longer provides Disabled Assistance Loans, but consider its other loan programs, your state's resources, and a private advocacy group's offerings

By Karen E. Klein, Bloomberg BusinessWeek

Smart Answers March 19, 2010

There was once an SBA program for the disabled called the Disabled Assistance Loan, which provided up to $150,000 in loans at 3% fixed interest to handicapped people starting a business. Apparently this program no longer exists, but I can find no reference to a change in the Federal Register or on Why was this program discontinued? Disabled entrepreneurs really could use such loans to get their businesses started. Is there an alternative?—A.S., Bloomington, Ind.

You're right. Some years ago, the Small Business Administration did have a direct loan program specifically aimed at disabled entrepreneurs. "It was always funded by Congress, but since 1994 no appropriations have been made to fund the program at all," says David J. Hall, an SBA spokesman. "The program still exists in the statutes, but since it receives no appropriations, it no longer operates."

A January 2006 report on SBA programs completed by the Congressional Research Service notes the demise of funding for the disabled assistance loan program. Proponents of terminating the program "believed that these business owners did not face challenges that differed significantly from other small business owners," the report states.

Agency Alternatives

You might investigate SBA loan guarantee programs that are available to all entrepreneurs. The agency's Web site has information on the 7(a), 504/CDC, and microloan programs. "The 7(a) loan provides financing for most business purposes, for both startup and established businesses, and it is delivered through banks and other lending institutions," Hall says. The 504/CDC loan program provides long-term financing to small businesses to acquire fixed assets, such as real estate. The microloan program is designed for entrepreneurs looking for no more than $35,000. "These loans are delivered through a network of intermediaries or microlenders who also provide technical assistance," Hall says.

You should also look to your state's vocational rehabilitation agency, a federally funded program with resources for education, training, and employment resources for the disabled. There may be information or counseling for individuals pursuing self-employment and entrepreneurship through the Indiana Department of Human Services.

A private advocacy organization, the U.S. Business Leadership Network, works to advance businesses owned by disabled entrepreneurs. It has 60 affiliates representing 5,000 employers, says Jill Houghton, the organization's deputy executive director. Its annual conference is set to be held in Chicago in September, with a focus on employment, supplier diversity, and the disabled marketplace, she says.

On the Brink of Certification

This year the group launched the first third-party, national certification program for disabled-owned businesses. The program's director, Aditi Dussault, has worked in the past doing certifications for companies owned by women, gays, and lesbians. She says the BLN is close to certifying 20 businesses owned by disabled entrepreneurs since the program started in January. "We hope to get 60 to 100 firms certified by the end of the year, and 30 corporate partners who accept our certification," she says.

Like woman-owned business certifications, the BLN's program will connect with corporate supplier diversity programs to facilitate relationships for disabled entrepreneurs, Dussault says. "This opens a new door for these companies to approach larger corporations that often have convoluted procurement structures," she says. Certification requires a site visit, a $200 fee, and typically takes 60 to 90 days to complete.

Karen E. Klein is a Los Angeles-based writer who covers entrepreneurship and small-business issues.


Anita Howard, Senior Project Manager