About
THE CENTER FOR HIGH-GROWTH ENTERPRISES
PROPTECH
CLIMATE TECH
LOGISTICS
1-ON-1
ADVISORS
ENTREPRENEURIAL
ECOSYSTEMS
BUSINESS
MODELS
SCALING
STRATEGY
SECOND STAGE ACCELERATOR
FINTECH
EDTECH
GOVTECH
MERGERS
ACQUISITIONS
RESTRUCTURING
MAIN STREET
TO
WALL STREET
INNOVATION
FOR IMPACT
DESIGN + BUILD
RESOURCES
LEVERAGE
AI + ML
AGILE
PROCESSES
THE CENTER FOR HIGH-GROWTH ENTERPRISES
Why We Established
Small and medium-sized enterprises (SMEs) are the backbone of the U.S. economy, contributing significantly to job creation, innovation, and economic dynamism.
Funding SMEs is essential for sustaining economic growth, fostering innovation, and creating jobs in the United States. By ensuring that SMEs have access to the necessary capital, policymakers, financial institutions, and other stakeholders can support the development of a vibrant and dynamic business ecosystem. Addressing the challenges SMEs face in accessing capital and implementing targeted solutions will not only benefit these businesses but also contribute to a more prosperous and resilient economy.
The Role of SMEs in the U.S. Economy
SMEs account for a substantial portion of the U.S. economy. According to the U.S. Small Business Administration (SBA), SMEs make up 99.9% of all businesses in the country and employ nearly half of the private workforce. These enterprises operate across various sectors, including manufacturing, services, technology, and retail, driving economic diversity and resilience. SMEs are often more agile and innovative compared to larger corporations, capable of quickly adapting to market changes and introducing novel products and services.
Importance of Funding SMEs
-
Economic Growth: Access to capital is vital for SMEs to grow and scale their operations. Adequate funding enables these businesses to invest in new technologies, expand their product lines, enter new markets, and increase their production capacities. This growth not only boosts the individual businesses but also contributes to overall economic expansion. As SMEs grow, they generate increased revenue, which in turn leads to higher tax contributions and improved public services.
-
Innovation: SMEs are often at the forefront of innovation. They play a critical role in developing new products, services, and processes that drive industry advancements. Funding provides the necessary resources for research and development (R&D), allowing SMEs to experiment with innovative ideas and bring them to market. This innovation is crucial for maintaining the competitiveness of the U.S. economy on a global scale.
-
Entrepreneurship: Access to capital encourages entrepreneurship by lowering the barriers to entry for new businesses. When potential entrepreneurs have access to funding, they are more likely to take the risk of starting new ventures. This entrepreneurial activity leads to the creation of new SMEs, fostering a dynamic business environment and contributing to job creation.
Access to Capital Drives Job Creation
-
Direct Job Creation: When SMEs receive funding, they often use it to hire additional employees to support their expanded operations. This direct job creation is one of the most immediate and tangible impacts of access to capital. According to the SBA, small businesses created 1.9 million net new jobs in 2019, demonstrating their critical role in job creation.
-
Indirect Job Creation: The growth of SMEs also leads to indirect job creation through increased demand for goods and services from other businesses. For example, an expanding manufacturing SME may require more raw materials, leading to job creation in the supply chain. Similarly, service-based SMEs might contract out certain functions, creating opportunities for other businesses and freelancers.
-
Multiplier Effect: The job creation impact of funding SMEs extends beyond direct and indirect employment. Increased employment leads to higher disposable incomes, which boosts consumer spending. This spending stimulates demand across various sectors, leading to further job creation in a ripple effect. The multiplier effect highlights the broader economic benefits of supporting SMEs.
Challenges in Accessing Capital
Despite the clear benefits of funding SMEs, many face significant challenges in accessing the necessary capital. Traditional banks often consider SMEs high-risk due to their smaller size and lack of established credit histories. As a result, SMEs may struggle to secure loans or face higher interest rates and unfavorable terms. This funding gap can stifle their growth potential and limit their contribution to job creation.
Our Teams Deliver Customized Training, Technical Assistance & Consulting Services
Denise Huginnie
CEO & MANAGING DIRECTOR
Rex Draughn
CPA, CMA, CIA, CFM, EDFP, DCFP
Strategic Partnerships
