Big companies are usually the ones making headlines, but it’s often the small businesses in a community that really make up the backbone of that local economy. It’s estimated that small businesses created 1.6 million jobs in 2019 alone, according to the SBA’s Office of Advocacy. Let’s look more closely at how small businesses affect communities and job opportunities.
Local Business for the Local Economy
The U.S. Small Business Administration released a report in 2019 citing that it was small businesses that generated 44% of all economic activity in the United States. It was also reported that same year that small businesses created two-thirds of all jobs in America. Community members who find employment with small local businesses also enjoy a higher income than those who are earning with a big, non-local organization. In fact, economists have long believed that it’s the big, non-local firms that actually depress the local economy in many areas.
This is caused by the fact that big box or large corporations have internal systems that operate accounting, legal, supply, and maintenance, and those departments are often not located anywhere near the facilities. Small businesses will also have a need for these departments but instead will outsource to professionals also located within the same community. This creates a healthy interconnection between businesses and services and all of it is generating income that is then put back into that same local economy. These businesses are also, in many cases, investing in community improvement initiatives as well which only further strengthens those economic bonds and growth. Small businesses looking for SBA loan approval should highlight the ways in which their business will improve the local economy.
Job Creation
The most significant way that small businesses help the local economy is through job creation. Having a healthy variety of local job opportunities is crucial to overall economic progress for individual families and the community as a whole. When people can rely on local jobs with a short commute or even a walkable commute, workers can significantly reduce their job-related expenses. The fewer job expenses a person has, the more income they will have available to invest back into their local economy.
If you are operating a small business or planning to start a small business, SBA loan approval could be a pivotal part of your plan. If you would like to learn more about SBA loan approval and other financial tools that you can use to make your business goals a reality, please contact us today at MCDC, Michigan’s #1 SBA lending provider.