Entrepreneurs Can Use the HUB Zone in Urban Core Areas

by T. Martin
(New York)

Reviewed: June 4, 2024

Visitor Comment: A really cool tool for businesses in the 'hood is the HUB zone program, which the U.S. Small Business Administration runs.

Unlike some programs where the benefit goes to the local government first, this one really is business-friendly if you genuinely are trying to grow a business in a gritty urban area.

The initials stand for Historically Underutilized Business zone. This is a preference for federal contracts.

The business's part of the deal is that you have to agree to locate a "principal office" in the HUB zone and you also have to agree that 35 percent of employees will live in the HUB zone area within a certain period of time.

A majority of the business has to be owned by U.S. citizens, or also it could be owned by a community development corporation.

Not every business sells something that the federal government needs. A sandwich shop won't qualify, but many kinds of professional services can. The federal government buys many kinds of office supplies, architectural services, surveying, data and information services, training, and plenty of other things.

To learn about the rules for this program, you go to the official HUB zone site. They also have procurement offices in major cities.

Editors' Reply: We really like the HUBZone concept as a tool to investigate.

The four original authors of this site are split on this one. Two reported that the HUBZone incentive has been working well in their cities, and the other two said that it is underutilized in their particular region.

Our feedback from communities indicates that program improvements made in 2020 have been helpful in making the program seem simpler, so we are somewhat hopeful that businesses coming back to life as the pandemic wanes will check out this opportunity.

Generally as you can tell from reading this website, we think any kind of entrepreneurship support that the government or the quasi-governmental or private economic development organization can offer is a big plus providing there is a favorable cost-benefit ratio.

Combining this with other available tools is important in leveraging investment in your city or town.

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