Starting a Business

Self Employment Assistance

If you are unemployed and want to start a business, you might qualify for self-employment assistance as part of your state's unemployment insurance benefits program. The program is called Self-Employment Assistance. It offers a weekly allowance sent to you as a check, as well as free training on starting a business.

Can entrepreneurs collect unemployment?

Yes. If you are unemployed and starting a business, you can still get unemployment benefits.

Even better, you can tell your family you are getting "self-employment assistance" funding from the government.

That's sounds a lot better than saying "I'm collecting unemployment right now," doesn't it?

The Self-Employment Assistance program is a phenomenal program that is designed to help unemployed workers while they are establishing businesses and becoming self-employed.

History of Self-Employment Assistance

You might be surprised to learn that this program originated with the acclaimed North American Free Trade Agreement (NAFTA) bill.

NAFTA was signed into law in December 1993. This legislation affected the national Unemployment Insurance (UI) Program by allowing states the option of permitting profiled unemployed individuals the ability to receive payments from the unemployment fund for the purpose of establishing a business and becoming self employed.

Long story short, with Self-Employment Assistance, participants receive weekly self-employment allowances while they are getting their businesses off the ground.

At no additional cost, while still getting an allowance for living expenses, Self Employment Assistance program participants get free self-employment training and individual counseling through an established, successful, no-cost self-employment course;

Once enrolled in a Self Employed Assistance program, you will also get extensive technical assistance with startup business issues. That includes help on loan packaging assistance, marketing advice, contacts with commercial real estate brokers or bank officers, obtaining necessary licenses, and fine-tuning your business plan.

How Self-Employed Allowances Work

Self-employment allowances are the same weekly amounts as the worker's regular unemployment insurance benefits. Participants work full-time on starting their business instead of looking for wage and salary jobs.

Under these programs, States are allowed to pay a self-employed allowance, instead of regular unemployment insurance benefits. Recipients of self-employment allowances typically will get waivers on the unemployment compensation "actively searching for work" requirement.

As mentioned above, in addition to getting the self-employed allowance, you will often get free training on how to start a business. This is often available through local community colleges, as well as through private institutions.

How to Qualify for Self Employment Assistance Programs

Generally, in order to receive these benefits, an individual must first be eligible to receive regular unemployment insurance under State law. Individuals who have been permanently laid off from their previous jobs and are identified (through a State's profiling system) as likely to exhaust regular unemployment benefits are eligible to participate in the program.

Individuals may be eligible even if they are engaged full-time in self-employment activities - including entrepreneurial training, business counseling, and technical assistance.

Be aware that this program is not offered in all states. This is a voluntary program. States don't have to offer it.

So far, here are some of the Self-Employment Assistance offerings: Delaware, Maine, Maryland, New Jersey, New York, Oregon and Pennsylvania have Self-Employment Assistance programs.

To apply for Self Employment Assistance, just contact your State Unemployment Insurance agency as soon as possible after becoming unemployed. At the time you file your claim you should ask whether a Self-Employment Assistance program operates in your State.

This is a valuable program that helps the U.S. economy. Self-Employment Assistance offers dislocated workers the opportunity for early re-employment.

The program is designed to encourage and enable unemployed workers to create their own jobs by starting their own small businesses, but inevitably many of these new entrepreneurs will prosper and hire employees, thus accelerating the cycle of economic growth.

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Conversation Board

Do you think that Self-Employment Assistance is a good program? Or is it a waste of funds? Please weigh in with your opinion by posting a comment below.

  • Andrew posted on 3/18/2009
    This is an excellent program. Since many people now have an "out" from jobs they didn't really like in the first place, some will be trying to start up that business they've had in the back of their mind. Since innovation and entrepreneurship are such a vital part of the economy, this is a great program! Thanks for the article!
  • obala posted on 11/17/2009
    Great information on starting a business. But can i get funds from any of the private companies to start my business?
  • Ken Gaebler posted on 11/18/2009
    Ken Gaebler
    Obala, most of these self-employment assistance programs are geared around entrepreneurial training and they are usually not startup investment sources. However, the business training you get from these organizations might be very helpful to you as you go about raising money for a new business. Good luck in your new venture. Drop us a line some time and let us know how it's going.
  • Gigi posted on 2/11/2010
    The program is great in theory. However, in Pennsylvania, you will be denied Emergency Unemployment Compensation Benefits(EUC)if you choose to participate in the self-employment assistance program. Neither the UC office , PA Careerlink or SEA program provider will tell you B4 you sign up for SEA because they want you to join. Especially the provider. That's how they make their money. If your are unemployed and have enough money to survive after your regular UC benefits are exhausted, then you're ok. BEWARE.If you will NEED EUC benefits to pay your bills after regular UC has exhausted DO NOT SIGN UP FOR SEA. The program does more harm than good.
  • L posted on 5/13/2010
    Due to physical restrictions, I've exhausted many of my options in my current profession in which I have a bachelor's degree. This may help me, as I was already working for others as an subcontractor - work that I've had to turn down since sitting here on unemployment for the last few weeks. I've wanted to do similar work for myself, instead of for other firms, and this may give me the go ahead that I need.

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