OAR 585-010-0050: Policies for Funding Self-Employment Business Ventures

(1) Subject to the conditions provided under this rule, Commission may provide financial support to clients for funding self-employment business ventures. Clients who are entering the Business Enterprise Program do not meet the federal definition of self-employment under the Rehabilitation Act and are not subject to the requirements of this rule. (2) The following definitions apply to this rule: (a) “Equipment” means an item that is determined necessary for the individual’s employment goal. (b) “PASS” means Plan to Achieve Self-Support; (c) "SBA" means the U.S. Small Business Administration; (d) “SBDC” means Small Business Development Centers; (3) The following basic criteria apply to this rule: (a) A client must intend to establish or run a business to become financially independent. Financial support will only be available to establish or run a business that may reasonably be expected to provide income to the client, commensurate with the individual's strengths, abilities, capabilities and interests. (A) Commission will not fund "hobby" businesses. A “hobby” business is defined as one that is casual or recreational in nature with no intention of earning income at or above a living wage; also referred to as a “not for profit” business. (B) Commission will not fund businesses designated as tax-exempt by the Internal Revenue Services (IRS); also referred to as a “non-profit” business. (b) If a client is involved with a business partnership, limited liability corporation (LLC) or corporation, they must present written evidence of being the controlling partner or controlling shareholder of the corporation. A provision in the Partnership Agreement must be made for the client to settle all debts should the business not succeed. Commission will assume no financial liability for debts incurred by the business partnership, LLC or corporation. (c) Speculative or high-risk business ventures will not be considered by Commission. These include those which present a risk beyond the control of the business owner or those which are so subject to economic whims as to have an unpredictable future. (d) The client must present documentary evidence to indicate that a reasonable effort has been made to obtain comparable financial support, when available. Evidence must include one or more of the following: application and rejection from a lending institution, PASS benefits sheet, request for investments, or list of personal assets to be used for the business. (A) If financial support from another source(s) is identified to fund the business in part or in whole, a request to obtain financial support from that source(s) should be made before requesting financial support from Commission. If the request was denied because of an insufficient business plan, the client must revise the plan and resubmit it to the funding source. (B) Where partial financial support is obtained elsewhere, the client must submit copies of the relevant documentation to identify the extent of that financial support. (C) Where denial of financial support outside of Commission is based on the availability of personal or family resources, the client will be expected to utilize those resources before requesting agency funding support. (D) When no comparable financial benefits or services are available, Commission may fund reasonable and necessary start-up costs for a business as part of a client’s IPE. In order for a plan to be viable, other funding sources may be necessary to cover costs identified in the business plan that would not be covered by Commission. (4) A client seeking financial support from Commission to become involved in a self-employment business venture must complete a comprehensive assessment. (a) Commission will provide or arrange for an assessment by Commission staff or by competent business persons outside of Commission to assess the business skills, background, and potential of the client seeking financial support. Portions of the assessment may be conducted by business persons, such as a representative of the Oregon Small Business Development Center. (b) The comprehensive assessment will cover the following: (A) Evaluation of previous work experience, especially in the same or a similar industry to the proposed business or in other self-employment; (B) Understanding of other career options and availability of jobs in the present and future job market; (C) Communications skills necessary in the proposed business (written and verbal skills, along with capability to maintain and interpret financial records for the business); (D) Factors such as willingness to make personal financial investment in the business, ability to make appropriate decisions, dependability, follow-through, organizational ability, adequate travel skills as demonstrated by interaction with agency personnel and former business colleagues; (E) Alternative skills of blindness adequate to function in the business; knowledge of technology, adaptive technology and software applications currently being used in the management of similar businesses; (F) Demonstration of money/resource management skills consistent with running a viable small business; and (G) Background or training in financial management skills required for managing a self-owned business. (c) Where the comprehensive assessment results indicate that a client lacks some of the skills necessary for successful business management, Commission may make available and require training in those specific skill areas, especially the alternative skills dealing with blindness and financial management skills. (5) The client must prepare a well-researched and written comprehensive business plan such as that required by a bank or the SBA. The client may seek assistance in developing a business plan from outside sources, such as the SBA or the SMDC at community colleges. (a) The plan must include an itemized list of equipment or business-related expenses which the client requests Commission provide. (b) The client must make a formal presentation of the plan to Commission. If the plan is accepted, the decisions made will lead to the development or amendment of the IPE. Any support by Commission must be a part of an agreed upon IPE. (c) If the total request for financial support and technical assistance for business startup is less than $3,500, the client’s vocational rehabilitation counselor may not require a formal business plan. However, in providing assistance less than $3,500, there still should be sufficient evidence that the business is viable. Financial support for business startup purposes must be clearly documented. (d) Requests for financial support for an existing business, which exclusively involve adaptive equipment, may require documentation of the viability of the business rather than a formal business plan. Documentation may include one or more of the following: customer invoices, sales receipts, recent tax returns, or business financial statements. (A) Vocational rehabilitation services for qualified individuals seeking assistance with an existing business may be provided under the following circumstances: (i) The existing business is consistent with the individual’s unique strengths, resources, priorities, concerns, abilities, capabilities, career interests, and informed choice; (ii) Disability-related barriers to work, as identified by the client in consultation with their counselor, affect the individual’s ability to continue operating this business; and (iii) Without vocational rehabilitation intervention, the individual will not be able to continue operating the business. (B) Commission will not provide vocational rehabilitation services to a client solely to expand or update an existing business, including situations to make a business profitable, if there are no disability-related barriers. If an individual is requesting a service such as this, the client’s counselor may provide the client with references for alternative community resources that the individual may seek out. (C) Vocational rehabilitation services and the client’s IPE will be designed to address disability specific barriers. The client’s business plan also must address those barriers that make the business unsuitable. (i) In the event the barriers cannot be removed, the business will not be supported by Commission and alternate goals should be explored by the client with the aid of their counselor. (ii) In the event the client’s business goal is viable, vocational rehabilitation services may be provided in order to make the business suitable. (6) Financial support for any service provided under an IPE is contingent upon the availability of funds to Commission. Financial support should not place a burden on Commission’s resources to the extent that Commission would be unable to provide services to other clients. (7) A client who receives financial support or services from Commission to fund their business venture must provide timely, at a minimum semi-annually, financial statements and other documentation as requested by Commission showing progress toward becoming financially independent. Examples of documentation include, but are not limited to: business bank statements, profit/loss statements against business plan projections, progress against planned startup activities, and marketing plan execution. (a) Commission’s support is designed to assist in the initial startup of a business; it is not to be considered an ongoing resource, and in no case will business losses be reimbursed by Commission. (b) Development of a comprehensive business plan is expected to adequately capitalize the business and limit the need for ongoing financial support by Commission. (8) Any equipment for the business must be purchased in accordance with Commission’s equipment policy provided for under OAR Chapter 585, Division 20. (a) Under the criteria in OAR 585-020-0060, ownership of equipment may be transferred to the client. The client’s counselor will determine appropriateness of this action. Regardless of ownership, the client is responsible for adequately maintaining the equipment. (b) Any equipment whose title is not passed to the client will be returned to the agency when it is no longer required for the purpose for which it was procured.