As small businesses in West Virginia struggle to get off the ground, some entrepreneurs seek new funding sources | Money

As she sits on a sofa across from a stack of green tie-dyed shirts, Shamika Robinson beams with pride when talking about the downtown Charleston office space she’s had for a little over a year.

In 2022, Robinson launched Luv Enterprises LLC., which rents cars to people under 25, those with poor credit, and others who can’t use or afford major rental agencies. She’s driven up, down, and across West Virginia to deliver rental cars directly to those who need them, all part of her motto of “getting people moving with love.”

“I started kind of quickly understanding like, ‘oh, my gosh, I’m a lot of these people’s last step,’” Robinson said.

But funding the business has been expensive. Luv Enterprises was built almost entirely with her own money, including maxed out lines of credit, and cars registered in the names of Robinson and her family members.

“That’s one of the unfortunate things,” she said. “As a new business, when you go to start, there’s nobody who gives you money based on your dream.”

Despite a range of funding options and plenty of available capital within the state, newer business owners say that they often struggle to figure out how to raise enough money and get connected with the right support.

For years, West Virginia leaders have marketed the state as being “open for business,” a call made in the hopes of attracting new corporations and promoting the Mountain State as a haven for entrepreneurs and small business owners.

“We can go out and recruit the large and we can get the wins, and celebrate those big home runs, but the singles really build your economy,” Economic Development Secretary Mitch Carmichael told lawmakers earlier this year.

But much of that support for small businesses — which include loans, marketing help, and other funding — are more accessible to established businesses with several years under their belt. Those with high-risk ideas, new entrepreneurs still figuring things out, and businesses that haven’t fully proven themselves just yet have a harder time accessing West Virginia’s growing entrepreneurship network.

“They don’t necessarily have processes in place yet to accommodate early-stage startups,” said Carrie White, a co-founder of Entrepreneurship Ecosystem Experts, a consulting business focused on connecting local entrepreneurs to resources.

A growing support network needed by thousands

Talk about a business in West Virginia and you’re almost guaranteed to be discussing a small one. In 2023, there were nearly 110,000 small businesses in the state, accounting for roughly 98.8 percent of businesses statewide, according to federal data.

But operating a small business can be difficult. Money is often a significant barrier. Unlike nonprofits, which are eligible for grants and philanthropic support, small businesses often self-fund, find support from an investor or take out a loan to manage things.

And getting those loans can be complicated, requiring businesses to not only show potential lenders strong plans for how they’ll successfully turn a profit, but also that they have good credit, and collateral to cover the loan amount if they default. That can make it harder for newer businesses that are still building credit to get the money they need to start.

“Over and over and over again, there is a need for funding, there is a need to understand the types of funding that are available, there is a need for credit repair to get people in a position to borrow funding,” said Nora Myers, executive director of the West Virginia Women’s Business Center.

West Virginia Department of Economic Development spokesman Andy Malinoski said in an email that the state offers several supports for small business owners, adding that many of the state’s resources and programs “are announced by press releases, success story examples and amplified across state social media.”

The state also started the West Virginia BusinessLink, which provides details about a range of local support providers, banks, and other entrepreneurial organizations in the hopes of better connecting people to the resources they need. The BusinessLink is part of the state’s Small Business Development Center, the main state agency focused on entrepreneurship and small business support.

Still, it can be difficult to get this knowledge in front of first-time business owners who might not know where to look. And even when the knowledge is there, it can be a challenge to overcome some of the funding barriers newer businesses face.

“The state has great traditional programs,” said White, who also helps with the annual Bridging Innovation Summit and works with local governments to help small businesses and expand options for entrepreneurship within the state. “What we’re looking at now is more non-traditional funding options, we need a little more risk-taking.”

A local program offers resources–and a shot at free money

J.C. Henson, a co-owner of the Oakwood BBQ Company in Martinsburg, said that after being denied for loans years ago, he and his two business partners decided to rely on their own money to fund their food business, which serves smashburgers, fried chicken sandwiches, and traditional barbeque four times a month.

“Unfortunately, being that we’re a restaurant style business, and the failure rate is so high, it wasn’t a risk that a lot of folks are willing to take,” Henson said.

Last year, Henson and his partners came across a new potential funding source: a local pitch competition called Build-Up Berkeley. Launched by the Berkeley County Development Authority in 2023, the program is part financial training and part Shark Tank, with ten small businesses receiving coaching and special classes before participating in a pitch competition for a $10,000 cash prize provided by CNB Bank.Jennifer Smith, executive director of the development authority, said that the decision to combine small business education with a competition for a no-strings attached cash prize was intentional.

“We wanted to add capital because we felt like that was needed,” she said. “There’s a lot of incentives for larger businesses, but not so much the smaller.”

The Oakwood BBQ Company won the Build-Up Berkeley competition and took home the $10,000 prize as well as an additional “People’s Choice” award. The money has been crucial in helping the growing food stand expand the business and move toward selling alcohol.

“We did renovations,” Henson said, adding that the cash helped with several construction projects, including adding a new roof on the property and building on site bathrooms. The competition was also helpful for Tyler Kolb, who worked with his wife to start Cloud Nine Events, an event planning business and venue, last year. Cloud Nine came in third, winning $2,000.

Kolb said that since there isn’t much grant money available in the state, the competition was a good way to get extra cash to cover business expenses.

“It’s a win-win, you get exposure advertising, and you get to go through and hopefully win a prize,” he said. “So I mean, that obviously helped with the startup costs.”

Newer state initiatives aim to provide more support

Helping early-stage businesses find money and access to state services requires intentional efforts to publicize what is available, White said. This includes getting more information out about local investors willing to provide seed money in exchange for a stake in a business, capital investment programs, banks open to providing smaller loans to help entrepreneurs starting out, and local economic development authorities willing to support small business owners.

The state has already started some programs that could help, like the West Virginia Capital Access Program, which partners with a mix of local development authorities, early-stage investment groups, and the West Virginia Jobs Investment Trust to provide startup venture capital funding and higher-risk loans than banks traditionally offer.

Robinson, the car rental business owner, initially got some outside money to help her maintain vehicles and secure the office space through a lender recommended by the state office of the federal Small Business Administration. But after paying off her first loan, and the roughly 60 percent interest attached to it, Robinson grew frustrated. For months after, the experience turned her off of the idea of trying to get additional financial support from a private lender or the state.

Now, after almost two years of running her business, she recently received her first grants, including $5,000 from the city of Charleston. She’s using the money to start automating the rental agreement process for her cars.

And as she expands, Robinson says she’s starting to move towards a new goal: starting a dealership on Charleston’s West Side that will provide affordable cars and services to communities in need.

“I think people need to see success to know that it’s possible,” Robinson says. “Otherwise, they’ll never believe it.”