New legislation introduced Wednesday on the floor of the U.S. Senate by Charles Schumer, D-N.Y., targets small businesses needing an extra boost to commercialize products.
The Small Business Innovation to Job Creation Act of 2010 would provide a grant to businesses that have already received research and development funds from the U.S. Small Business Administration and other government agencies, giving the companies money so that they can bring their technology to market.
Schumer said around 250 businesses in New York state would be eligible for funding, including Schenectady’s TransTech Systems.
“We have lots of companies that have well-developed ideas. These companies have done their research and their prototypes are promising,” said Schumer.
Small Business Innovative Research grants are competitive and administered by federal agencies. The grants provide up to $100,000 for six months of research exploration for businesses in phase one and up to $750,000 for up to two years of more research funds in phase two. Currently the grants do not stretch beyond phase two into phase three, when businesses seek to commercialize the technology they have developed.
“The government does a lot to support business research, but not enough on development,” Schumer said. “So many entrepreneurs close their doors when they are about to launch. It’s very hard to get financing at this level. To take a small company to make it bigger you have venture capital and bank loans but before a company has sold its product it’s too small and untested to get any kind of financing.”
The funding would bridge the gap between the “Valley of Death” for promising start-up businesses that commonly fail between the point of research and development and product commercialization.
The legislation was written and first introduced by U.S. Rep. Paul Tonko, D-Amsterdam, in March. The bill will be part of an overall small business jobs bill set to be debated on the U.S. Senate floor within the next month and could be enacted as early as summer, according to Schumer’s office.
The program would mean TransTech Systems would hire nearly a dozen employees, as projects that were previously shelved because of financing issues could be relaunched, according to TransTech Systems President and Chief Executive Officer David Apkarian.
The company, which utilizes a platform technology for sensing and measuring for mostly construction and biomedical fields, currently has 45 employees.
“This is a jobs bill that not only will create jobs for a time period, it will create jobs that will continue to give jobs,” Apkarian said. “It’s a narrow sector that can pay back big dividends.”
David Gibson, president of X-Ray Optical Systems in East Greenbush, said his company would also benefit from the legislation. The company uses X-ray technology to measure environmental and product contaminants in products.
“We would start hiring engineers and other individuals within a couple of weeks. We would use it to finish the development work and do field testing and demonstrations. We would hire people immediately to finish that,” Gibson said.